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Business Reporter
THE National Social Security Authority (NSSA) has invested $17,25 million into First Mutual Holdings Limited to enhance the group’s underwriting capacity.
In an abridged audited financial statement for the year ended December 31, 2017, NSSA said it has made a strategic decision to consolidate its insurance interests resulting in the disposal of NicozDiamond Insurance Limited (NDIL) shares to First Mutual Holdings Limited (FMHL). The latter being a subsidiary of NSSA.
“Further, the shareholders injected $17,25 million into FMHL to enhance the underwriting capacity of the enlarged group. This resulted in the increase in the authority’s shareholding from 51 percent to 68,8 percent in FMHL,” it said.
The authority concluded the transfer of 80,92 percent NDIL equity to FMHL in December last year in line with the strategy to consolidate the insurance cluster.
Going forward, the authority believes strategic and technical partnerships will culminate in a solid and more competitive insurance group that delivers shareholder value. NSSA, whose revenue during the period under review declined by one percent to $349,6 million from $354,7 million in 2016, also indicated that it had upped its shareholding in Rainbow Tourism Group (RTG) from 36,38 percent to 56,34 percent.
This was done to enable RTG management to have a clear direction and perform without having to deal with divergent shareholding issues.
“Following the successful capital raising of $22,5 million needed to restructure the statement of financial position, the authority subsequently increased its stake in RTG to 67,23 percent in 2018.
“The business is strategically relevant to the economy with key foreign currency generation capacity, more-so with the increasing number of foreign visitors in the country, particularly in Victoria Falls.”
It said it would thus be pertinent to leverage on the positive sector fundamentals to ensure RTG optimises shareholder value as the business positions for internationally reputable brands affiliation through strategic and technical partnerships.
NSSA’s contributions and premiums declined by 11 percent from $276,5 million in 2016 to $247,1 million last year while premium declined by 13 percent from $50,2 million in 2016 to $44,5 million in 2017.
The decline in contribution was attributable to a reduction in the number of registered employers from 28 162 to 25 800 due to company closures.
Investment income increased by 133 percent from $23,5 million in 2016 to $54,6 million last year.
“This is attributable to the increased amount invested in the money market and treasury bills, which partly offset the decline in interest rates, capital uplifts on loans and advances and bad debt recoveries.
“Total claims and benefits increased by 21 percent from $142,7 million in 2016 to $172,3 million in 2017.
“The economic hardships being faced by most pensioners have resulted in the increase in the number of claims as more pensioners who previously did not bother to claim are submitting their claims resulting in a surge in arrear pension payments,” said NSSA.
The authority’s assets grew by 30 percent to $1,371 billion last year from $1 billion in 2016.
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