FIDELITY Life Assurance recorded a dip in net insurance premiums last year as the deepening economic crisis took its toll.
By Kudzai Kuwaza
According to the company’s financial statements for the year ended December 31 2016, the group recorded net insurance premiums of US$14,8 million, down from US$16,6 million the previous year.
“The difficult operating environment impacted on the group’s premium income generation and collection ability,” Fidelity Assurance chairman Fungai Ruwende said in a statement.
Ruwende said the anchor group, Fidelity Assurance, recorded a decline of 8% in premium income to US$12,4 million compared to US$13,5 million in 2015. He added that the revenue was 33% lower at US$29,9 million as the remaining stands at Fidelity Life Southview Park were sold out.
The Malawi-based Vanguard Life Assurance, Ruwende revealed, recorded premium income of US$2,5 million, down 24% from the US$3,1 million recorded in the previous year. Profit for the period amounted to US$2,3 million.
The company’s microfinance unit posted a profit of US$1 million, an increase from US$0,38 million in the prior year. The actuarial consultancy business contributed US$26 000 while the asset management posted a loss of US$190 000 due to fair value adjustments on its property portfolio.
He said with the Southview Park project now in its final stages, income from the sale of stands was lower than 2015 with total revenue generated by the group amounting to US$36,6 million during the period under review.
Ruwende revealed that the acquisition of the Longford Estates land bank resulted in the group assuming debts of US$14 million in a land for debt swap transaction that increased the finance costs incurred to US$2 million against US$0,5 million in prior year.
He said insurance claims were US$7,2 million against US$6,7 million the previous year. Ruwende added that property development expenses were much lower at US$4,5 million compared to US$20 million in the prior year. This, he attributed to the near completion of the Fidelity Life Southview Park project.
Ruwende said the board had taken action to correct the issues which were raised by the forensic audit of the company and was done in consultation with the Insurance and Pensions Commission.