Insurance industry booming

environment during the period.
Typically, insurance companies tend to be hardest hit by an illiquid market. On the other extreme end, improved cash flows in the economy and an accompanying increase in industry capacity utilisation result in improved insurance uptake.
Fidelity Life Assurance and NicozDiamond reported favourable results, reflecting the improved performance of the insurance industry in general.
Fidelity Life Assurance’s premium income more than doubled to US$7,7 million, while benefits, claims and expenses also doubled to US$5,7 million.
The Fidelity Life Group posted a profit of US$2,9 million from continuing operations, a 17 percent improvement from the previous period.
Total attributable profit stood at US$3,35 million, representing a growth of 77 percent in the same period.
In a statement accompanying the
2010 financial results, Fidelity Life Assurance chairman Mr Solomon Tembo hinted at possible expansion of operations, although simultaneously lamenting the debilitating macro-economic conditions
“While demand for policies is increasing, necessitating re-opening of additional branches previously closed, low disposable incomes and low levels of liquidity in the economy still hamper the full growth of the insurance industry,” he said.
The Fidelity Life Group’s operations include Fidelity Life Assurance, Vanguard Life Assurance, Fidelity Financial Services and Fidelity Life Zambia (Pvt) Ltd.
Premium income for Fidelity Life Assurance amounted to US$4,75 million, while claims and expenses amounted to US$3,27 million. The operation’s profit after-tax was US$1,5 million.
Vanguard Life (Malawi) made a profit before tax of US$933 000.
Fidelity Funeral Services registered a profit for the year amounting to
US$211 486.
Fidelity Life Zambia, however, posted a loss of US$313 463 due to impairment of assets and administration costs.
The subsidiary was placed under liquidation in September last year, and has not traded for the past 18 months.
Meanwhile, short-term insurer NicozDiamond’s gross premium levels rose 54 percent to US$18,6 million in the financial year to December 31.
But the Zimbabwe Stock Exchange-listed insurer suffered a loss before tax of US$842 754, after operating expenses of US$5,5 million and nearly US$7 million worth of costs from claims and acquisitions.
During the period, NicozDiamond’s investment income declined to
US$14 113 compared with US$1,7 million in the prior year.
The company also invested in property, unquoted equities, money market and stocks quoted on the ZSE.
The upturn for insurance firms has been buttressed by the re-bounding economic fundamentals during the course of last year.
The economy experienced a Gross Domestic Product growth of 8,1 percent last year up from 5 percent in 2009, while inflation closed 2010 at a positive 3,2 percent.
Zimbabwe’s insurance industry is also set to receive a huge confidence boost as the country is expected to host the 38th edition of the African Insurance Organisation (AIO) conference in Victoria Falls from May 21 to 26.