Sundaymail Editor
Business Reporter
LISTED insurance giant NicozDiamond on Friday posted a commendable set of results for the half year ended June 30, 2017.
The results showed that, despite operating in an environment described by management as highly competitive, the group still managed to grow both its top line and bottom line. Gross premium written (GPW), which shows the sum of both direct premiums written and assumed premiums written, was up 4 percent to US$23,8 million from US$22,8 million prior year comparative. Group profit after tax for the period amounted to US$1,2 million, a marginal decline of 0,5 percent on June 2016.
Earnings per share, however, went up by 41 percent to US 0,24 cents from US 0,17 cents prior year. The Zimbabwean operations contributed most of the GPW at 78 percent and recorded what management called “a commendable growth” of 7,4 percent from prior year. It is strongly believed that the electronic cover notes system has significantly helped in growing premiums during the period under review.
In a commentary accompanying the results, NicozDiamond chairman Mr James Karidza said: “The electronic cover notes system has significantly helped in curbing leakages from fake cover notes that were previously rampant in the market.”
The company is, however, ceding a bit more business with reinsurance ceded increasing to US$8,4 million from US$7,5 million. The growth of 9 percent in business ceded is higher than the growth in business written, which might indicate the company is cautious on the risk it can take given the operating environment were claims are increasing.
In the six months period, claims went up by 7,2 percent to US$7,8 million from US$7,3 million. The claims outcome was also worsened by the group’s Malawi operations where claims went up due to the impact of price adjustments on imported motor spare parts.
Other operating expenses also went up by 7,7 percent to $4,2 million from $3,9 million prior year comparative. Operating expenses, however, include retrenchment costs incurred in Malawi to align future expenses to income.
Premium debtors were reported to make up 20 percent of the total assets of the insurance market as at March 31, 2017. Mr Karidza said most payments are still being spread over the policy period, impacting negatively on availability of investable cash.
“This in turn adversely affects investments returns and the growth of the investment portfolios,” he said. NicozDiamond is currently trading under a cautionary statement with regards the intention of the major shareholder NSSA to dispose of its shares to First Mutual Holdings Limited (FML). processing, alternative use of tobacco, fertiliser production) and firms supported by measures to ramp up production.
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