Online Reporter
Nelson Gahadza, Zimpapers Business Hub
First Mutual Holdings Limited (FMHL) says durable macroeconomic stability will be critical to consistent revenue growth and reducing volatility in the group’s investment portfolio.
The group’s strong investment and property gains drove its performance for the half-year ended June 30, 2026.
Chief executive officer Mr Douglas Hoto, in a statement of financials for the half-year period, said the diversified financial services group recorded significant gains from its investment and property portfolios, cushioning pressure in some of its core insurance businesses.
During the period, net investment return surged 568 percent to US$13,7 million, driven by favourable movements in the equities markets and higher yields from fixed-income securities, while fair value gains on investment property jumped 1 257 percent to US$13,8 million.
“The gains lifted the value of the group’s investment property portfolio to US$150 million. Our results reflect overall positive performance, underpinned by the resilience of our core operations and major contribution from our investment and property portfolios,” said Mr Hoto.
He said the group’s insurance contract revenue rose six percent to US$92,8 million, driven by continued efforts to retain customers, new products and disciplined underwriting.
However, the insurance service result declined seven percent to US$13,1 million, largely because of higher claims and increased insurance contract acquisition costs.
“We remain focused on enhancing underwriting efficiency and expect this metric to improve in the second half of the year,” Mr Hoto said.
During the period under review, rental income at group level increased by one percent to US$4,4 million, reflecting broadly stable occupancy across the property portfolio.
The group’s health insurance operation, First Mutual Health Company, recorded a three percent increase in insurance contract revenue to US$39,7 million from US$38,4 million previously.
Mr Hoto said the growth was attributable to increased membership and contribution reviews during the period.
However, the claims ratio increased to 83,95 percent from 82,15 percent, reflecting higher claims volumes, which the group attributed mainly to a growing chronic disease burden and increased claims frequency.
Despite the higher claims ratio, First Mutual Health Company’s profit rose sharply to US$8,7 million, representing a 2 828 percent increase from the prior year, supported by improved operating performance and higher investment income.
First Mutual Health Services recorded broadly stable performance, with revenue increasing marginally by 0,3 percent to US$5,1 million.
Profit declined by six percent to US$0,2 million, mainly because of higher operating costs associated with expansion initiatives, including business development, infrastructure and capacity building.
First Mutual Life recorded insurance contract revenue of US$8 million, six percent higher than the previous year, driven by growth in group risk schemes and retail funeral products.
Its profit rose to US$3,2 million, supported by a favourable investment outturn, revenue growth and cost management.
The general insurance cluster also delivered mixed but largely improved results.
FMHL’s short-term insurer, NicozDiamond Insurance, recorded an 11 percent increase in insurance contract revenue to US$21,5 million, driven by new business in the marine, accident and motor classes.
Profit after tax increased 271 percent to US$5,1 million, mainly because of fair value gains on investment property.
In contrast, FMHL’s Mozambique-based Diamond Seguros faced pressure during the period, with insurance contract revenue falling eight percent to US$2,3 million, following non-renewals.
In local currency terms, revenue declined to 146,6 million meticais from 159,8 million meticais in the prior year and the business recorded a US$0,1 million loss, largely reflecting adverse reinsurance performance.
The reinsurance cluster recorded growth across its major operations.
First Mutual Reinsurance Zimbabwe increased insurance contract revenue by four percent to US$8,4 million, supported by expansion of its treaty portfolio and deeper relationships with cedants, including wider regional risk coverage.
Profit rose to US$3,4 million, a 4 797 percent increase, largely reflecting exceptional investment performance.
In Botswana, FMRE Property and Casualty increased insurance contract revenue by 14 percent to US$13,8 million, supported by sustained portfolio expansion and new business acquisition.
Profit after tax increased 45 percent to US$1,5 million, underpinned by stronger investment returns.
Within the investment cluster, First Mutual Properties reported an eight percent increase in rental income to US$4,6 million, supported by higher average rental rates and stable occupancy.
Profit after tax increased 432 percent to US$10,4 million, largely because of enhanced fair value gains on investment properties.
First Mutual Microfinance, however, faced pressure from lower interest rates, with net interest and fee income declining 32 percent to US$0,9 million as lending margins and fee-based revenue came under pressure.
The business nevertheless broke even, compared with a US$0,2 million loss in the prior year.
First Mutual Wealth Management recorded a 14 percent increase in investment management fees to US$0,8 million, while funds under management expanded 18 percent to US$173,9 million. Profit after tax increased to US$0,3 million, supported by investment income and new mandates.
Looking ahead, Hoto said the group would continue to focus on customer needs and adapt its product offering to changing market conditions.
He said a stable macroeconomic environment would create scope for further growth and diversification, including greater investment in real assets to manage local and regional risks over the medium to long term.
