FIRST Mutual Holdings Limited (FMHL) is best understood as a diversified financial services group anchored on insurance, with complementary exposure to property, investments and financial services.
At its core, the group collects premiums across life, health and general insurance, pools these funds, and deploys them into income-generating assets such as property, equities and fixed income instruments. The insurance arm remains the engine of the business, while subsidiaries, such as First Mutual Properties (FMP), provide balance sheet support through rental income and asset appreciation. In simple terms, FMHL earns money by underwriting risk, investing those premiums and generating additional income from its asset base.
The group’s financial year 2025 (FY25) performance marked a notable recovery, with revenue increasing by 19% to US$206,2 million, driven primarily by growth in insurance premiums amidst a rebound in investment income. Insurance contract revenue accounted for US$176,8 million, confirming that underwriting remains the dominant driver of top-line performance.
Within this, health insurance continues to lead (36% of revenue), supported by US dollar policy migration and rising demand for medical cover, while general insurance remained stable (23% of revenue), reinsurance moderated slightly (19% of revenue) and life assurance rose modestly (7% of revenue). Profitability improved significantly, with FMHL reporting a net profit of US$14,3 million compared to a loss in the prior year of US$26,3 million, largely due to the absence of fair value losses on investment property (FY25: US$3,9 million gains vs FY24: US$50,4 million losses) and improved underwriting margins.
However, cash generation lagged earnings, reflecting the non-cash nature of some income streams, particularly investment-related gains.
The group’s business model is further supported by its property segment, FMP (4% of revenue), which generates stable rental income (FY25:US$8,5 million vs FY24:US$8,3 million). While this provides predictable cash flows, the segment is capital-intensive, accounting for roughly half of total assets, and is more of a store of value than a high-growth driver.
Investment income (3% of revenue), although relatively small (FY25:US$7,2 million vs FY24:US$1,7 million), drives fluctuations in earnings due to its sensitivity to market movements; within this segment, it is important to distinguish between realised and unrealised gains. Fees and other income streams (6% of revenue), including asset management and microfinance, provide additional diversification but remain modest in scale relative to insurance operations.
Looking ahead, management has outlined plans to deploy between US$5 million and US$10 million in capital expenditure, targeting health services, funeral businesses and regional expansion. This strategy reflects a deliberate shift toward vertical integration, particularly in health, where FMHL is investing in clinics and pharmacies to align service delivery with insurance offerings.
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The rationale is straightforward: by controlling parts of the value chain, the group can manage costs, improve service quality, and mitigate risks associated with currency instability. Expansion into markets such as Rwanda and Mozambique is also aimed at diversifying revenue streams and tapping into more stable operating environments.
However, the move toward vertical integration is not without challenges. The regulatory environment in Zimbabwe has shown resistance to insurers directly owning service providers, particularly in the health sector, due to concerns around market fairness and pricing transparency. This creates a degree of uncertainty around the sustainability of FMHL’s integrated model.
At the same time, competition in general insurance, especially in motor policies, continues to intensify, placing pressure on margins. Rising costs, including fuel and healthcare inflation, are also expected to weigh on profitability in FY26, even as demand for insurance products remains resilient.
Management’s forward-looking strategy also includes leveraging technology, expanding into the informal sector through micro-finance, and increasing exposure to small and medium enterprises. The “cash economy strategy” aims to use lending as an entry point to insurance uptake, effectively broadening the customer base.
While this approach is strategically sound in a largely informal economy, its success will depend on execution, credit risk management and the ability to scale efficiently. The group’s increasing US dollar revenue base, now at approximately 85%, positions it well to preserve value and maintain relevance in a dollarised environment.
From a balance sheet perspective, the group faces a moderate asset-liability mismatch, with a significant portion of assets tied up in illiquid property against relatively short-term insurance liabilities. While manageable under normal conditions, any sharp increase in claims, particularly in the health segment could place pressure on liquidity and necessitate reliance on operating inflows or investment income. This underscores the importance of underwriting discipline and prudent capital allocation.
In conclusion, FMHL remains a key player in Zimbabwe’s insurance sector, with a business model that combines underwriting, investment and property exposure. The FY25 results demonstrate a recovery in performance, but also highlight the hybrid nature of earnings and the importance of distinguishing between core and non-core income.
Looking into FY26, regulatory constraints, cost pressures and execution risks will be critical factors to monitor. Overall, FMHL represents a stable, insurance-led franchise with moderate growth prospects, operating within a sector that remains essential but increasingly competitive.
Taimo is an investment analyst with a talent for writing about equities and addressing topical issues in local capital markets. He is an active member of the Investment Professionals of Zimbabwe community, pursuing the Chartered Financial Analyst charter designation.
