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FML records 44% growth after tax



FIRST Mutual Holdings Limited recorded a 44% growth in after-tax profit to US$17,6 million in the year ended December 31, 2018, down from US$12,2 million in 2017 driven by increased investment income and a positive fair value on investment property.

Operating profit for the period went up by 37% to US$11,1 million, with the group’s recent acquisition NicozDiamond Insurance Company Limited (NDIL) contributing US$2,4 million and other group companies US$8,7 million.

In a statement accompanying the group’s financial results, chairperson Oliver Mutasa said the group attained investment income of US$34,3 million for the year against US$32,9 million in 2017.

First Mutual’s total assets improved by 17% during the period under review to US$385,5 million, compared to US$329,9 million as at December 31, 2017.

“The growth was driven by increases in listed equity values of US$48,9 million and investment property of US$7,2 million, while debt securities at amortised cost declined by US$9,6 million,” Mutasa said.

The group’s consolidated rental income for 2018 increased by 19% to US$7,7 million due to turnover rentals on retail space and an increase in occupancy on high value lettable space.

Chief executive Douglas Hoto said gross premium written (GPW) from the group’s health business improved by 11% to US$62,3 million, driven by organic growth on corporate clients and acquisition of new business.

First Mutual’s life and pensions business GPW increased by 23%, with pensions and savings GPW 37% higher than 2017 and life assurance GPW improving by 7%.

“GPW at US$27,8 million was 35% higher than in 2017. The strong growth is as a result of higher single premiums which normally arise through the setup of pension annuities and preservation funds when employees retire, resign or are retrenched.”

“Shareholder risk business GPW, which mainly comprises the traditional Funeral Cash Plan (“FCP”), mobile based e-FML and Group Life Assurance (“GLA”), at US$15,7 million, grew by 7% relative to 2017.The growth was driven by a 27% increase in mobile based e-FML and Group Life Assurance,” Hoto said.

He said NDIL’s GPW grew by 29% from prior year to US$40,6 million due to organic growth, change in sum insured to match the foreign currency parallel market premiums in October 2018 and the recently launched Post Insurance business.

The group’s other recent purchase, Tristar Insurance GPW was 33% ahead of 2017 at US$6,5 million due to greater broke support, high success rate for recurring business and increased market confidence and the effects of new business initiatives launched in 2018.

The group’s property business revenue grew by 9% to US$8 million owing to new lettings in high value space, turnover based rentals in retail properties and new rental income from recent acquisitions.

Hoto said First Mutual Wealth Management business achieved lower investment fees of US$1,4 million in 2018 compared to US$1,7 million in 2017, which resulted in lower operating profit.

He said the group entered 2019 in a position to invest in client-driven innovation and create efficiencies which is expected to result in growth and free cashflow generation.

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