NICOZ DIAMOND Insurance Limited saw its profit after tax declining by 0,5% to $1,2 million in the six months ended June 30, 2017 after the group incurred retrenchment costs at its unit in Malawi.
BY TARISAI MANDIZHA
In the comparable period last year, the group posted a profit after tax of $1 209 822.
The retrenchment costs totalled $175 133.
In the period under review, net premium written grew to $15 million, which was a marginal increase as compared to the same period last year.
Nicoz Diamond chairperson James Karidza said the group recorded a 17% decline in operating profit of $1,5 million for the half-year period as compared to the same period last year.
“The reduction was mainly as a result of retrenchment costs incurred in Malawi to align future expenses to income. There was also an increase in claims costs in Malawi due to the impact of price adjustments on imported spare parts,” Karidza said.
He said the Zimbabwean entity contributed 78% to gross premium written and recorded commendable growth of 7,4% compared to June 2016, which was above the estimated market growth.
Profits from insurance underwriting included in operating profit amounted to $1,1 million, a decrease of 14% from prior year of $1,3 million.
“The Zimbabwean entity’s underwriting profit increased by 46,6% due to the increase in gross premium written and controlled operating costs,” Karidza said.
He said the Malawian operations underwriting positions, which incorporated the retrenchment costs, was expected to improve in the future given the steps taken to address claims and operating expenses.
During the period under review, income from properties and other investments contributed $1,2 million to operating profit. This was a 77,7% growth from prior year due to the good performance of the quoted equities in Zimbabwe.
In the outlook, Karidza said the company was ready to exploit any opportunities that were presented.
“The company has robust strategies in place to safeguard the profitability of the company which has been sustained in past periods. In Malawi, the company stands ready to exploit the opportunities from the economic improvements being recorded,” he said.
“The project undertaken to restructure the organisation is expected to benefit the company from 2018 onwards. Competitive capital attraction is underway at Diamond Seguros Mozambique and Diamond General Insurance Zambia.”