Vanguard out of the woods, says Fidelity

Eric Chiriga

FIDELITY Life Assurance of Zimbabwe Ltd (Fidelity) says it has managed to turn around its loss-making Malawian subsidiary, Vanguard Life Assurance Ltd (Vanguard).



face=”Verdana, Arial, Helvetica, sans-serif”>Vanguard recorded a profit after tax of $288 million for the six months ended June 30.


The company’s net premium income grew by 93% compared to the same period last year.


“The projections for the year show a full recovery of the company and an increase in the surplus is expected,” Solomon Tembo, the chairman of Fidelity, said.


Fidelity took over Vanguard from the holding company, Zimre Holdings Ltd (ZHL).


Zimre wholly-owned Vanguard.


Until its listing on the Zimbabwe Stock Exchange (ZSE), Fidelity was also a wholly-owned subsidiary of ZHL.


The Fidelity group recorded an after tax surplus of $78,81 billion for the six months ended June 30, a growth of 486% from the previous year.


The group’s net premium income increased by 262% from $10,99 billion in 2004 to $39,83 billion this year.


Investment income grew to $70,36 billion, a growth of 725% from the previous year.


Tembo said their premium finance division that was established in the first quarter of this year performed satisfactorily, making a profit after tax of $131,34 million during the six months ended June 30.


“An application to the Reserve Bank of Zimbabwe (RBZ) for a separate licence has been made,” Tembo said.


The premium division is mainly involved in premium financing for general insurance policies for both commercial and personal insurance. Fidelity Life Assurance Ltd company had a total income growth of 462% from $19,49 billion in 2004 to $109,64 billion this year.


“This was mainly due to good performance in the equity investment market,” he said.


The company recorded a surplus after tax of $81,57 billion, a growth of 601% compared to the same period last year.


Tembo said the restructuring exercise at Fidelity Life Asset Management (Flam) was successful. However, the results for the six months ended June 30 still show a loss after tax.


Tembo said the operating environment remained challenging during the first six months of the year.


“The erratic fuel supply has made it difficult for our financial advisors to reach every corner of our market.”


He said despite these challenges individual life premium income grew by 591% from $1,4 billion last year to $9,67 billion this year. However, the lapse ratio deteriorated by 14% in comparison to the same period last year.


Claims grew by 362% from the previous year and Tembo said the high increase was mainly from withdrawals due to retrenchments and employee mobility.