NicozDiamond Insurance recorded an increase in gross premiums of 41% for the half year ended June 2011 due to the improvement in insurance uptake by clients.
Gross premiums grew to $11,7 million from $8,3 million over the same period last year.
NicozDiamond deputy chairperson Albert Nduna in a statement said the playing field in the business environment was competitive but the liquidity challenges had resulted in payment plans being negotiated, impacting negatively on availability of investable cash.
“The Insurance and Pension Commission is doing a lot of work to enforce disciplined underwriting. This has gone a long way in ensuring that rates firm up resulting in reasonable profit margins,” Nduna said.
NicozDiamond registered an increase in underwriting profit during the period under review of 184% to $492 859.
Its Zimbabwean operation made profit while the Ugandan unit recorded a loss due to inability to cover claims and expenses.
Nduna said retentions for the group remained above market averages resulting in net premium leaping to $7,9 million from $5,7 million.
“The efforts made in business acquisition in both Zimbabwe and Uganda paid off as new business acquired was almost 25% of the total premiums written. Claims were significantly higher than the same period in 2010, but it is expected that they will remain within internationally accepted ranges of 40%-60% to net earned premiums,” he said.
Profit after tax for the group amounted to $559 218 from a loss of $530 250 over the same period in 2010. Nduna said it would sustain the profitability recorded to date and the company would seize opportunities to consolidate its market positioning.
“In Uganda a lot of work is being done to ensure the company is adequately capitalised to be able to write and retain more business thereby reducing the acquisition cost ratio that currently inhibits profitability,” he said.
The company continues to see growth prospects due to improvements in the mining, agriculture and telecommunications sectors of the economy.