FIRST Mutual Holdings Limited (FMHL) has posted a 14% increase in gross premium income due to the strong performances of the health insurance, life assurance and short-term insurance businesses.
BY VICTORIA MTOMBA
The gross premium income increased from $88,5 million to $101 million during the year ended December 31 2013.
Addressing analysts yesterday FMHL group chief executive officer, Douglas Hoto said the health business was the major contributor, followed by the life assurance and reinsurance businesses.
Hoto said profit after tax was down 83% to $1,627 million due to higher claims ratio for the health insurance business and the introduction of actuarial control cycle.
The group set aside $4,4 million in shareholder risk reserve during the period under review.
Hoto said expenses for the group were up by 41% to $104 million due to an increase in claims and shareholder reserves.
“The economic environment is difficult and efforts are being made to control costs,” Hoto said.
He said going ahead the group would be launching an asset management business by the second quarter of this year.
“Regulatory approval was also granted to merge the two reinsurance businesses operating in Zimbabwe, under a composite licence,” he said. “The synergies to be realised from such an agreement will lead to stronger reinsurance balance sheet that can attract more business from both local and regional operations.”
The property business Pearl Properties’ rental income rose by 2% to $9 million due to a marginal increase in rental per square metre and higher turnover-based rentals.
In 2013 rental per square metre stood at $8,25 up from $8,18 in 2012 and the annualised rental yield was lower at 7,9% from 8,6% in 2012.
“The vacancy rate for the year was 23,3% from 21,1% in 2012, a result of voluntary surrender of space by tenants due to difficult operating conditions in their different industry sectors,” the group said.
Hoto said Tristar continued to be the problem child for the group after its premium went down by 25% to $6,8 million as the company adjusted its operations from its legacy issues. FMHL chief financial director William Marere said during the 12-month period claims were up by 33% to $49,7 million while commission was up 38% to $6,3 million.
He said the group’s assets rose to $205 million after increasing by 16%.