Zimre Holdings Ltd (ZHL) net earnings came down to US$0,8 million in the half year to June from US$2,7 million in H117 owing to a reduction in non-recurring revenue lines and low investment income.
In a statement attached to the group’s financial statements, the reinsurance group said it was hit by a reduction in non-recurring revenue lines, low investment income stemming from low money market rates, stock market volatility and high claims from its Mozambican business.
Last year, institutional and retail investors made a killing on the local stock market as players rushed to preserve value in the wake of rising inflationary pressures.
The stock rally only came to an end after the military action that saw long-time ruler Robert Mugabe being forced to step down in November last year from an all-time market high of US$16 billion.
Management said gross premium written (GPW) at US$15,8 million was in line with what was achieved in the same period last year.
Emeritus Reinsurance Zimbabwe continued on a recovery path with GPW increasing by 23% from US$6,5million in 2017 to US$8 million in the period under review. Credit Insurance Zimbabwe Limited recorded a 58% growth in GPW reflecting the positive impact of the restructuring of the business that commenced in FY17 when ZHL acquired a controlling stake in the company.
“However, there was a decrease in business written in Mozambique, Malawi and Zambia in US$ terms owing to among other things, the relatively lower economic activity in those markets and weakening domestic currencies, in the period under review,” the company said.
Total income declined by 14% from US$17,3 million to US$14,9 million in the period under review. This was mainly due to the impact of property portfolio restructuring at ZPI.
“On 21 June 2018, the South African Reserve Bank approved the closure of Emeritus Reinsurance Company South Africa and the transfer of its short-term insurance business to Emeritus Reinsurance Botswana. The move is expected to expand Emeritus Reinsurance Botswana’s reinsurance activities to encompass the South African market,” the company said. —