Fidelity Life Assurance of Zimbabwe profit after tax for the year ended December 2016 dipped to $2,3 million from $5,1 million recorded in the previous year, as the business continues to be affected by high claims, low uptake of products and policy surrenders.
BY FIDELITY MHLANGA
Total revenue generated by the group closed the year at $36,6 million, down from $52 million generated in 2015.
In a statement accompanying the financial results, board chairman Fungai Ruwende said the tough operating environment was characterised by employers failing to remit contributions deducted from employees.
The difficult operating environment, Ruwende said, impacted on the group’s premium income generation and collection ability resulting in the group recording net insurance premiums of $14,8 million in 2016 against $16,6 million in the prior year.
The group’s total assets increased to $112,5 million from $105,7 million in 2015 whereas total liabilities increased to $88,4 million from $82,4 million during the period under review.
The company said insurance claims were $7,2 million against $6,7 million in the prior year.
The group’s property development expenses were significantly lower at $4,5 million compared to $20 million in the prior year reflecting the near completion of the Fidelity Life Southview Park project.
With the Southview Park project now in its final stages, income from sale of stands was lower than 2015.
The acquisition of the Langford Estates land bank resulted in the group assuming debts of $14 million in a land for debt swap transaction that increased the finance costs incurred to $2 million in against $500 000 in prior year.
Fidelity Life Assurance recorded a 8% decline in premium income to $12,4 million compared to $13,5 million in 2015 where as Malawian-based Vanguard Life Assurance recorded $2,5 million premium income 24% down from $3,1 million recorded prior year.
The group’s microfinance unit posted a $1 million profit up from $380 000 recorded in the prior year.
The company expects to complete Fidelity life Southview park project in the new financial year and embark on the Langford Estates project anticipated to yield over 12 000 residential stands.
“The operating environment remained difficult during the year under review. Liquidity problems continued to be experienced with chronic shortages of cash across the entire economy. The country remains a net exporter with the 2016 trade deficit being $2 billion as imports continued to outstrip exports,” Ruwende said.