Online Reporter
Business Reporter
Fidelity Life Assurance (FLA) says it continues to innovate and develop new products in order to diversify its revenue streams.
The group, in its financials for the year ended December 31 ,2024, said continuous innovation resulted in its products remaining relevant and demand being consistent in its chosen market segments.
The group also says it continued to scale up its operations and has entered the funeral services and asset management markets.
“Fidelity Life Company, as the main operating unit of the Fidelity Life Group, continued to record strong performance, and the continuous innovation resulted in its products remaining relevant and demand being consistent in its chosen market segments,” said chairman Mr Livingstone Gwata.
He said the Vanguard Life Assurance of Malawi (VLA) continued to scale up its operations under new management, and in order to diversify its revenue streams, the unit entered the funeral services and asset management markets.
“VLA has also entered into strategic partnerships both in Malawi and South Africa which are anticipated to have a significant positive impact on its revenues in the medium term,” said Mr Gwata.
He noted that locally, the group’s funeral services business remained firmly on course with its turnaround strategy bolstered by the acquisition of a brand-new fleet, expansion of branches, launching of new products and conclusion of strategic partnerships locally, in South Africa and beyond.
Mr Gwata said the performance of the Asset Management Company in the year under review was buoyed by the spectacular success of the Eagle REIT.
On the other hand, he said ZAC Global made considerable progress in its great trek into the region.
Mr Gwata said the group’s focus on digitalisation and financial inclusion has enabled the company to continue to expand its customer base, improve operational efficiency and drive business growth.
He said during the year under review, the company introduced micro-insurance products that cater to low-income individuals and the informal sector.
“We have partnered with various stakeholders to expand our reach and provide insurance services to underserved communities within our markets.
“We intend to implement a mobile-based insurance platform to enable customers to purchase and manage their insurance policies with just their mobile phones,” he said.
In terms of financial performance, the group’s insurance contract revenue grew by 44 percent to US$11.4 million compared to US$7.9 million in the prior year.
Mr Gwata said the group’s customised service approach continues to drive uptake of the company’s product offerings on the market.
During the year under review, the Vaka Yako product performed very well and contributed significantly to the gross premium written (GPW) at 85 percent of the premium inflows.
On the premium inflows, the Zimbabwean operation contributed 68 percent for the year under review compared to 62 percent in 2023, whilst for the year under review, 32 percent was attributable to the Malawi operation, which contributed 38 percent in 2023.
“Insurance service result declined marginally by 8 percent owing to higher insurance service expenses incurred compared to the earned revenue,” said Mr Gwata.
For the year under review, the insurance service expenses increased by 68 percent compared to the growth in insurance contract revenue of 44 percent, thereby contributing to the decline in the insurance service result.
Net investment income grew by 54 percent compared to the prior year, from US$5.9 million to US$9.1 million, driven by fair value gains from investment property and interest income from money market investments.
Resultantly, the group profit for the period increased by 178 percent from US$2.3 million in the prior year to US$6.4 million in the current year.
Mr Gwata said the positive profit growth was driven by the increase in insurance contract revenue, investment income and other income.
Looking ahead, Mr Gwata said Fidelity Life Assurance intends to tailor-make products aimed at the diaspora market and the local informal sector.
