NICOZ Diamond’s property arm, Thirty Samora Machel, has begun putting up a US$400 000 façade on the insurer’s headquarters to enhance the building’s classification from tier C to tier B.
Nicoz Diamond’s General Manager Corporate Services Gloria Zvaravanhu told analysts recently the renovations were meant to enhance rental earnings through high occupancy levels.
The project is expected to be complete at the end of October this year, while the payback period has been put at five years.
In the six months to June, Nicoz Diamond group’s investment portfolio mix was skewed largely towards property and money markets. Property made up 54% of the mix, money market 36%, quoted equities 8% and unquoted equities 2%. The trend for Nicoz Diamond Insurance has money market 58% of investments, property 25%, quoted equities 14% and unquoted companies 3%.
The group’s investment income in the period was US$614 484. Of that amount, properties made up US$178 037, money market US$178 037, unquoted securities US$32 789 while quoted equities were in the negative at US$159 059. Zvaravanhu said as a long term player, Nicoz Diamond had to have exposure in property, equity and money markets and the portfolio mix was designed to take advantage of the opportunities which arose in these sectors. In terms of operations, MD Grace Muradzikwa said the half year saw insurance rates firming for some classes of business as rates moved towards normalisation.
Gross premium written in the period was US$14 million, up from US$11,7 million last year while the net premium underwritten was US$8 million, a marginal increase from US$7,9 million last year.
Net claims were at US$3,677 million, which was lower than US$4,48 million for the same period last year. Muradzikwa said there was, however, a general increase in the frequency and severity of claims, particularly for motor and fire classes.
“This, coupled with the fact that premium payments are spread over long periods of time, is putting significant pressure on companies’ ability to timely settle claims, ” Muradzikwa said.
There was nevertheless a 23% decrease in paid claims in the motor class and all the other classes except fire, which was up 53%. Only the fire class had shown an increase in the number of claims at 6,7% while the motor class was down 14%. The motor class made up 46% of the business portfolio mix from 49%, the fire class 21% from 22%, accidents 18% from 17%, engineering 6% from 4% and other 9% from 8% in the comparable period a year ago.
There was an increase in the pre-tax line to US$852 000 from US$475 000 but there was a drop in underwriting profits to US$303 000 from US$446 000. About 96% of the profits came from Zimbabwe operations while the balance came from FICO Uganda.
In terms of key ratios, the retention ratio was now at 56% from 67%, which general manager operations Noel Manika said was a deliberate move “following a not so good year in terms of claims.”
He said the focus going forward would be on risk management and doing account proliferation exercises. Muradzikwa said the group would focus on profitable growth, not just on the topline but also on the bottomline. She said this would be achieved by targeting the growing sectors of the economy.
“We are also going to place emphasis on prudent underwriting as well as consolidate the regional expansion drive,” she said.