NICOZ Diamond Insurance Limited group recorded a 52% jump in operating profit to $1,86 million due to 15% savings on operating expenses and top line growth in their first half results for the year.
BY TATIRA ZWINOIRA
Nicoz Diamond’s earned premiums and gross premium written (GPW) grew by 3% and 2% respectively. GPW was $22, 85 million for the first half of 2016 from the $22,40 million realise in the same period last year.
However, the company had a decline in profit after tax of 8% to $1,2 million in the period under review from $1,31 million.
In a statement accompanying the half year results, Nicoz Diamond chairman James Karidza said the short term insurance sector was expected to mirror the macro-economic growth projections.
“The short term insurance sector is also expected to mirror the macro-economic growth projections. The latest market statistics as at March 31 2016 show that the sector shrunk by 6,06% in terms of gross premiums written (GPW). The sector has been weighed down by an increase in premium debtors resulting from liquidity constraints while claims are on the increase,” Karidza said.
Early this year, regulatory authorities increased the capital thresholds of insurance players to $2,5 million from $1,5 million to boost market confidence.
Karidza said Nicoz Diamond was now well above the new capital thresholds.
“Profits from insurance underwriting amounted to $1, 35 million, an increase of 94% over the prior year. The Zimbabwe entity’s underwriting profit increased by 83% compared to the prior year for reasons explained above while the Malawian operations reported underwriting loss in period because of the impact of the Malawian Kwacha devaluation,” Karidza said.
He said business outlook for the remainder of the year was expected to remain subdued as the company would focus on managing business acquisition costs and other operating costs.
The Zimbabwean entity had a 10,4% growth compared to the first half of 2015 and continued to remain the largest contributor to the group’s revenues.
Nicoz Diamond has operations in Zimbabwe, Malawi, Uganda, Zambia and Mozambique.
Claims for the entity increased by 4,8% from 2015’s first half as the company processed heavy fidelity guarantee claims.