Fidelity Life is to spend US$20 million on developing its high density housing project on its 328-hectare land 14km south west of Harare.
Launching the project early this week, group CEO Simon Chapereka said the development, called Southview Park, will comprise 5 974 stands of 240 square metres each. The project will be funded from the group’s internal resources and institutional and pension fund partners.
Chapereka said the project was expected to take 15 to 18 months to complete. The land had been re-zoned as urban after the group purchased it from CFI for US$3,3 million.
However, Fidelity would only put the project to tender once it received approval from council to amend land use to high density from low density.
Chapereka said the stands will cost US$9 250 each, but the group also had flexible payment terms where buyers could pay a deposit of US$2500 and the balance would be spread over 60 months at US$125 a month.
“We will add a life and funeral policy for those who will be on instalments.”
Chapereka said 40 stands had already been purchased.
The development will also have 6 primary schools, 2 secondary schools, 6 crèches, 1 community hall, 5 churches, 14 flats, 2 commercial centres, one office space and one police station.
Chapereka said the group had made money on the US$5 million Manresa Park investment and only 30 stands were yet to be sold.
Fidelity’s share price has been an excellent performer since dollarisation, with last year’s performance even more exceptional — rising more than 600% in 2011 and 354,29% between March 2011 and March 2012 — after growing at a Compounded Annual Growth Rate (CAGR) of 122,17% in the three-year period commencing March 2009.
Operating in a sector closely aligned to — if not one that lags — the fortunes of the economy, the current share price reflects a huge outperformance.
Last year, Fidelity showed strong resilience after producing a sterling technical financial performance. Net premium income was particularly impressive after it grew by 53% to US$11,8 million on the back of strong demand for individual life products, whose net premium grew by 95% to US$4,8 million, despite the challenging operating environment.
On the other hand, net claims and benefits only grew by 35% to US$6,8 million, resulting in a technical profit of US$4,9 million which was 88% ahead of 2010’s US$2,6 million — a sign of strong underwriting processes (rating and pricing risks before assuming them by an insurance business).
Total claims, benefits and expenses to net premium income ratio improved by 4,2 percentage points to 71% from 2011. This was attributable to a four percentage points decline in the management expenses ratio to 60%, which is still high.