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Afre survives exposure saga


African First ReNaissance Corporation Limited (Afre) recorded $80,4 million gross income for the year ended December 31 2011 due to growth at its subsidiary First Mutual Life Medical Savings and the insurance business.

The solid performance was despite the turbulent period the group went through at the height of the ReNaissance Financial Holdings Limited (RFHL) saga.

Afre was exposed to the tune of over $6 million by RFHL following inter-party financial transactions that resulted in Renaissance Merchant Bank (RMB) being placed under curatorship.

RMB’s curatorship has since been lifted.

The gross premium for the group grew from $58,8 million during the same period last year while total income stood at $88,6 million from $65,2 million.
Finance director Kennedy Lemani told an analysts briefing on Monday that: “First Mutual Life Medical Savings Fund premiums of $31,2 million contributed 39% of gross premium income.

“Employee benefits gross premiums were $13,8 million while reinsurance contributed $16,3 million” .
He said profit for the year stood at $16,8 million for 2011 being driven by policy holder income and actuarial valuations.

Rental income for the group grew to $6,7 million from $5,7 million due to successful rental negotiations during the period under review.

“The annualised rental yield achieved in 2011 was 9,8% compared to 10,1% in 2010 due to slower growth in rentals relative to the appreciation in investment property values,” he said.

“The vacancy rate for 2011 was 22,5% in line with the company’s strategy to reduce the number of tenants per building and to complete property refurbishments.”

The group undertook actuarial valuations on life subsidiaries that resulted in policy holder liability of $66,9 million and a loss for shareholders of $6,9 million after a transfer to non-controlling interests and policyholders of $8 million and $15,8 million respectively.

Total assets for the group rose to $165 million.
Group chief executive officer, Douglas Hoto said it was targeting a gross premium of $86 million and rental income of $9 million in 2012.

Hoto said the group plans to spend $6,6 million on capital expenditure, net asset growth target of 12% and cost management target expense ratio of 25% in 2012.

In the first quarter of this year Afre recorded a gross income of $22,7 million.

Meanwhile, Hoto said the Insurance and Pension’s Commission (IPEC) had completed investigations that were launched on its subsidiaries Tristar Insurance Company, First Mutual Life and Pearl Properties last year.

“The group was under investigations by IPEC and the investigations have since been completed,” he said.

“The chairman Innocent Chagonda met IPEC last Friday and investigations have been closed.”
Ipec was ordered by the Finance ministry in May to investigate the three companies following links with former RFHL chief executive Patterson Timba.
Hoto said the group will be announcing new appointments soon.

“The group is still in transition and will be making announcements as we go,” he said.

The National Social Security Authority owns 54% in the group with the remainder of the share holding held by small investors.

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