Online Reporter
Nelson Gahadza
Senior Business Reporter
FIRST Mutual Holdings Limited (FMHL) delivered a sharp improvement in earnings during the first five months of 2026, with robust investment returns offsetting a surge in insurance claims and higher operating costs.
The diversified insurance and investment group reported a 202 percent increase in profit after tax to US$10,02 million for the period ended May 31, 2026, from US$3,32 million in the corresponding period last year.
Profit before tax also rose strongly, climbing 190 percent to US$10,85 million.
According to a trading update for the period under review, performance was underpinned by a remarkable recovery in investment income, as FMHL saw strong returns from financial markets, neutralising pressures from low underwriting margins caused by rising claims costs and increased policy acquisition expenses.
Net investment income surged to US$12,91 million from just US$268 000 in the same period last year, making it the single largest contributor to earnings growth.
Market analysts believe the results underscore a broader trend across Zimbabwe’s insurance industry, where insurers are increasingly relying on diversified investment portfolios to complement underwriting income amid persistent claims inflation and rising operating expenses.
According to the update, during the period under review, FMHL continued to expand its core insurance business.
Insurance contract revenue increased by 11 percent to US$77,12 million, with all three insurance clusters delivering double-digit growth.
Revenue from the Life and Health Insurance Cluster rose 10 percent to US$38,79 million, while the General Insurance Cluster grew 13 percent to US$19,84 million.
The reinsurance cluster recorded a 12 percent increase to US$18,49 million, lifting total shareholder revenue by 11 percent to US$83,59 million.
However, stronger business volumes were accompanied by a significant increase in costs.
Insurance service expenses climbed 19 percent to US$64,6 million, driven by an 18 percent rise in incurred claims and insurance contract expenses, together with higher acquisition costs linked to new business generation.
As a result, insurance service results before reinsurance declined 16 percent to US$12,52 million, reflecting tighter underwriting margins.
Nevertheless, FMHL managed to preserve overall underwriting profitability through improved reinsurance performance.
Reinsurance recoveries and commission income increased 49 percent to US$10,75 million, while net expenses arising from reinsurance contracts narrowed significantly.
This helped lift net insurance and reinsurance results by 9 percent to US$11,42 million despite pressure from higher claims.
