Health insurance boosts First Mutual earnings

Valid membership for the scheme as at 30 June 2014 was 111,538 compared to 89,954 in June last year.
A reciprocal increase in net claims of up to $33.5 million was recorded with health insurance slicing out a larger portion of $22 million. “The claims ratio for the business increased to 91 percent when compared to 81 percent in the prior year as members that were on waiting periods for certain procedures began to access service,” said Mtasa in a statement accompanying the report.

The company’s total assets value clocked $216,9 million from $205 million with property investment increasing by $11 million to $126.6 million from $115 million in December last year.

Mtasa said the decrease in rental collections was a reflection of the challenging economic environment as tenants were reducing the space occupied.

“The occupancy rate was 77.56 percent, a decline from the 79.6 percent achieved in the same period last year. Rental yield eased to 7.5 percent compared to 8.0 percent in June last year in sympathy with the lower rental income,” he said.

Mtasa, however, said the group’s statement of financial position grew by six percent to $216.9 million due to an increase in cash and cash equivalents of $5.1 million and the purchase of the Golden Stairs property by Pearl Properties at the beginning of the year for a total cost of $10.1 million. He said the property purchase was partially a million and hence the increase in borrowings.

Despite making an operating loss of $3.9 million linked to the increase in claims, the company generated more cash of $12.6 million from $3.6 million in December.

The entity failed to declare a dividend citing the losses made during the period.

Mtasa said the board was optimistic of improved performance through modified business processes amid economic challenges. He said the group would continue with its transformative exercise, which includes recently completed staff rationalisation and reviewing business models.

First Mutual Holdings Limited is a holding company with diverse interests in the financial services and property sectors.

The core subsidiaries are involved in the provision of life assurance and related products, with a strong and growing presence in short-term insurance, property investment and actuarial consultancy.

Its subsidiaries include Pearl Properties, First Mutual Health, First Mutual Life Assurance Company, Tristarinsurance Company, FMRE Property and Casualty (Zimbabwe), FMRE Property and Casualty (Botswana), FMRE Life and Health and African Actuarial Consultants.