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Enacy Mapakame
Insurance firm, First Mutual Holdings Limited profit for the six months to June 30, 2019, rose 2 244 percent to $201,6 million compared to $8,6 million achieved in the same period in the prior year.
Operating profit fell 17 percent to $4,5 million from $5,3 million on an increase in shareholder risk reserves, expansion projects underway and rationalisation expenses.
Basic earnings per share surged 1 356 percent to 17,92 cents from 1,23 cents in the same period last year.
Gross premium written (GPW) jumped 86 percent to $157,6 million as a result of conversion of USD business for the period 1 January 2019 to 24 June 2019 written by some strategic business units whereas last year it was at 1:1.
The group also attributed the performance to organic growth and acquisition of new business both in USD and local currency.
FML achieved a 5000 percent jump in investment income of $93,9 million for the period under review, compared to $1,8 million in the prior year comparable period in line with the performance of the equities market and the impact of converting foreign investments to Zimbabwe dollars.
At $6,6 million rental income for the period was 75 percent ahead of prior year on the back of new lettings, rental reviews during the period and increased turnover rentals. Occupancy levels increased to 82,79 percent from 74,44 percent.
Fair value gain on investment on investment property came in at $302,7 million from $5,6 million in the comparable prior year period.
Total assets jumped 318 percent to $944 million.
On business units, First Mutual Health, recorded a 55 percent growth in GPW to $46,1 million largely attributed to the impact of increased membership and in response to inflation. Claims payments for the period increased to $31,7 million from $24,9 million.
As for the life and pension business, First Mutual Life Assurance Company achieved a 33 percent growth in GPW for both life assurance and pensions and savings business increased.
GPW for life assurance business was $7,8 million which was 7 percent below prior year level largely due to traditional Funeral Cash Plan (”FCP”) policyholders struggling to sustain premium payments under the obtaining economic challenges.
Pensions and savings GPW came in at 61 percent to $18,7 million, driven by higher single premiums, amounting to $9,4 million.
Recently acquired business, NicozDiamond Insurance Company Limited GPW, at $51,3 million, was 133 percent ahead of the six months to 30 June 2018. The business was merged with TristarInsurance operations beginning of this year.
FMRE Property and Casualty (Proprietary) Limited – Botswana recorded GPW was 323 percent ahead of the same period last year due to the impact of translating the results to Zimbabwe local currency as opposed to the 1:1 against the USD in the prior year.
On regional business was driven by business from Zimbabwe and from other markets such as South Africa, Zambia and Namibia.
At $13,7 million, GPW for First Mutual Reinsurance Company Limited was 68 percent higher than prior year.
The positive variance compared to prior year was largely due to higher than anticipated USD business, amounting to US$3 million that was converted to local currency using interbank exchange rates as well as increases in Zimbabwe dollar insurance values as clients sort to keep values in line with market values.
Revenue from the property division – First Mutual Properties- grew 70 percent to $6,7 million rental reviews, lettings in vacant space and turnover rentals driven by continuous price adjustments in an inflationary environment.
The wealth management business grew investment fees to $1 million for the period compared to $0,6 million for the comparative year due to growth in funds under management.
As Government is putting in place measures to address economic challenges affecting the economy such as inflationary pressures and fiscal deficit, FML says it will also take a proactive position and prepare to take a significant role in economic development as well as take advantage of the opportunities that will arise.
Online Reporter