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Fidelity narrows losses to US$600k

Fidelity Life Assurance board chairman Fungai Ruwende

BY MISHMA CHAKANYUKA

ZIMBABWE Stock Exchange-listed Fidelity Life Assurance narrowed its after-tax loss by 52% to US$0,6 million in the year ended December 31, 2018 from US$1,3 million in 2017.

The group closed the year with a profit before tax of US$2,3 million, reflecting a growth of 213% from the comparative figure in 2017, but the growth was eroded by tax provisions of US$1,2 million, which resulted from tax health assessments conducted during the year.

In a statement accompanying the financial results, chairman Fungai Ruwende said the company’s gross premium income grew by 44% from US$14,2 million in 2017 to US$20,5 million in 2018.

The group’s total revenue declined to US$53,5 million from US$55,94 million in the prior year, while revenue from the sale of stands and interest income on stands debtors decreased by 36%, as the Southview development project reached its tail end.

Savings were realised on operating and administration expenses line and on cost of sales of residential stands, which decreased by 12% and 32% respectively. with the company’s legal costs decreasing.

The group’s insurance claims grew by 51% to US$7,4 million in 2018 from a comparative US$4,9 million in 2017.

Property values remained flat due to liquidity shortages in the US$ market, resulting in fair value gains on properties of US$0,5 million down from US$2,9 million in 2017.

Fidelity Life Assurance of Zimbabwe contributed 78% to the group’s total revenue and recorded a 38% growth in premium income in 2018.

“The company is on a positive growth trajectory, having recorded a 38% growth in premium income in the year under review,” Ruwende said.

“At US$14,8 million, premium income now constitutes 35% of the company’s total income up from 22% last year.

“The contributions to the company’s premium income were as follows: pensions business US$9,7 million, and life assurance business US$5,1 million, reflecting growth rates of 49% and 21% respectively against prior year numbers.”

The company’s subsidiary, Vanguard Life Assurance Company in Malawi, recorded a 44% growth in revenue driven by a 63% increase in premium income, which grew to US$5,7 million from a comparative 2017 of US$3,5 million. The subsidiary contributed 12% to the group’s total revenue.

The micro-lender, Fidelity Life Financial Services, contributed 8% to the group’s total revenue with its revenue growing by 31% to US$4,3 million from US$43,3 million in the prior year, due to a 20% increase in interest income on the subsidiary’s loan book.

The group’s other non-insurance subsidiaries continue to post profits and the group sees growth potential in the entities.

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