malvernmugadzikwa
Enacy Mapakame
Fidelity Life Assurance of Zimbabwe’s revenue for the nine months to September 30, 2022 doubled, compared to the same period last year driven by growth in the life assurance business. In historical cost terms, revenue was 234 percent ahead of prior year period.
According to the group, the life assurance businesses contributed 82 percent to group’s total core revenue underpinned by growth in individual life business due to an increase in the uptake of the Vaka Yako investment product premiums.
Aggressive premium reviews and employee benefits premium income growth as a result of salary increases, indexed business and foreign currency denominated products also contributed to the growth in life assurance business.
Non-insurance businesses contributed 18 percent to the core revenue with the micro-lending business spurring the non-insurance revenue contribution by 43 percent.
Total income for the nine months under review increased by 393 percent in inflation-adjusted terms and 681 percent in historical terms from the same period prior year. Fidelity attributed the growth in total income to premium income, fair value adjustments from investment property and equities.
The group’s profit for the period ballooned by 1 532 percent in inflation adjusted terms and 200 percent in historical cost terms reflecting a change in investment properties valuation methodology from US dollar valuations in prior year to local currency valuations during the period under review.
While Government implemented various measures to tame inflation, authorities also introduced high interest rates that are prohibitive to businesses.
Additionally, equities on the stock market have lost value in US dollar terms following pronouncements made in May this year to tame arbitrage behaviour on the stock market. Total market value in US dollar terms went down by 76 percent during the nine month period under review.
“The punitive interest rate regime adversely affected aggregate demand and the retail sector reported a decline in volumes.
‘‘According to the Ministry of Finance and Economic Development, Gross Domestic Product (GDP) growth for the current year is set to fall short of the revised projection of 4,6 percent.
“The RBZ has committed to maintain the current tight monetary policy and complementary measures to stabilise the exchange rate and prices.
“We expect month on month inflation to remain below 5 percent in the last quarter of 2022 resulting in a projected year-on-year inflation of 250 percent. The looming 2023 National Budget is expected to further reinforce the macroeconomic stability that the country has experienced in the second half of 2022,” said Fidelity in an update for the review period.
In terms of operational review, the life and pensions business lines doubled compared to same period last year as the group’s strategies continue to bear fruit.
According to Fidelity, all the non-insurance businesses namely micro-lending, medical, funeral, actuarial services, property and asset management continued to strive and show positive results during the third quarter of 2022 on the back of insistent business growth initiatives and cross-selling activities within the group.
Management is upbeat the business will finish the year on a positive trajectory as they respond to unfolding market trends to offer the appropriate products, services and solutions to the market.
Bongani Ndlovu