FML posts $393m investment loss

FIRST Mutual Holdings Limited experienced an investment loss of $392,8 million for the year ended December 31, 2019, owing to the decline in value on Zimbabwe Stock Exchange (ZSE)-listed equities as the market index grew at a slower rate than inflation.

BY TAFADZWA MHLANGA

In a statement, company chairman Oliver Mtasa said the assets for the year declined by 2% due to the devaluing of the Zimbabwe dollar-denominated bank balances.

“The group had an investment loss of $392,8 million for the period under review compared to investment income of $207 million in 2018. The loss was driven by decline in value on ZSE listed equities as the market index grew at a slower rate than inflation. Total assets for the year declined by 2% owing to the loss of value on listed equities, the Zimbabwe dollar-denominated bank balances and accounts,” Mtasa said.

However, the group recorded an after-tax profit of $27,6 million for the year ended December 31, 2019.

Rental income for the year amounted to $52,5 million and was ahead of prior year by 3% due to quarterly rental reviews and increases in occupancy rates in retail and residential properties.
The gross premium written (GPW) for the group decreased by 11% from the prior year due to the revision of sums insured in sympathy with the movement in the USD:Z$ exchange rate and the prevailing high inflation.

First Mutual Life Assurance Company (Pvt) Limited’s GPW decreased by 47% to $188,2 million in 2019, reflecting the below inflation adjustments to basic salaries that drive the employee benefits (pensions and group life assurance) division.

NicozDiamond Insurance Company Limited’s GPW grew by 17% to $448 million in 2019 owing to the US dollar business written in the period to June 2019, new business and the general revision of sums insured to median rates between interbank and alternative market rates.

The GPW for the First Mutual Reinsurance Company reduced by 3% to $156,1 million for the period under review.

The decrease was due to clients’ limited capacity to match the growth in the US dollar: Z$ exchange rate in revision of sums insured and hence premiums.

First Mutual Properties Limited’s revenue declined by 12% to $58,1 million in 2019 due to lower than inflation rental review rates.

First Mutual Wealth Management (Pvt) Limited Investment fees decreased by 22% to $7,8 million in inflation adjusted terms mainly due to the below inflation performance of some components of funds under management such as quoted equities.

First Mutual Health Company (Pvt) Limited’s GPW decreased by 30% to $361,7 million in 2019 due to sub-inflationary increases in premium rates as most clients were not in a position to absorb full increases.

The main business of First Mutual Holdings Limited and its subsidiaries is that of provision of life and funeral assurance, health insurance, short-term insurance, reinsurance, property management and development and wealth management.

First Mutual Holdings Limited is a public company, incorporated and domiciled in Zimbabwe whose shares are publicly traded on the local bourse.

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