Fidelity Life Assurance of Zimbabwe Limited recorded a 53% increase in premium income to $11, 7 million for the year ended December 2011 due to improved demand for individual life products.
Financial director Paul Razunguzwa told an analysts briefing in Harare on Tuesday that premium income increased from $7, 7 million the previous year while benefits, expenses and claims stood at $8,4 million from $5,8 million in 2010.
“The overall growth in premiums of 53%, the lower claims and expense growth of 45% and growth in non-insurance income led to an improvement in the group’s profit before tax from $3 million to $9,4 million, an increase of 209%,” Razunguzwa said.
He said underwriting surplus for the group stood at $4,9 million from $2,6 million, while total comprehensive income stood at $10,1 million, indicating an increase of 200% from $3,3 million.
Razanguzwa said the economic environment was characterised by political uncertainty, high country risk and liquidity conditions.
“Demand for individual life products improved in 2011 and is expected to continue improving going forward. However, low disposable incomes and low levels of liquidity will continue to have a negative impact on the rate of growth of business in the insurance industry,” he said.
Fidelity Life Assurance posted a premium income of $7,1 million with the bulk coming from employee benefits and the balance from individual life premiums.
“The recovery of the economy in 2011 and the resultant improvement in disposal income translated to improved business for the company,” he said.
The subsidiary posted an increase in profit before tax of $6,1 million from $1,7 million.
Fidelity Funeral Services registered 182% growth in profit before tax to $654 655 and premium income stood at $1,7 million.
Meanwhile, the group will undertake a private placement in Malawi to reduce its shareholding in Malawi to 51% from 67%.
The group’s managing director, Simon Chapereka, said: “We expect to raise MK350 million to fund the solvency gap for Vanguard Life Assurance Malawi.”
Chapereka said despite the problems being experienced in Malawi, the company grew in 2011.
“The company has benefited from changes in the pensions legislation in Malawi which now make it compulsory to contribute retirement benefits,” he said.
The other subsidiaries of the group registered $900 000 profit before tax. The company declared a $350 000 dividend for the period under review.