Group restructuring lifts Zimre Holdings in first six months of 2017
Insurance24 Reporter
HARARE, Zimre Holdings Limited gross written premium for the six months ended 30 June 2017 at $15.79 mln was lower than $16.32 mln recorded in 2016 same period. Despite the decline GWP, the group achieved a 113% increase in profit for the period to $2.72 mln compared to $220 649 in 2016 largely as a result of the ongoing restructuring and re-focusing anchored on the new strategic focus adopted in 2016.
“The performance was achieved despite the loss of $1.7 mln arising from the restatement to fair value less cost to sale of the investments in NicozDiamond and Fidelity Life which were re-classified as non-current assets held for sale,” Ben Kumalo, the Group chairman said in a statement of the financials.
The group’s profitability was also complemented by a turnaround in the net share of profit from Associates which contributed a positive $0.7 mln compared to a loss of $1.2 mln in 2016.
Financial Highlights
| In US million | Total Income | Total Claims
& expenses |
Profit for the
Period |
Cash & cash
equivalents |
EPS
(US) Cents |
| 2017 | 15.7
|
13.5
|
2.73
|
7.84
|
0.19
|
|
% change |
>3% up |
> 5% up |
>113% up |
> 29% down |
>53% |
|
2016
|
15.3 |
14.2 |
0.22 |
11.08 |
0.03 |
During the period under review, ZHL’ s total income at $15.7 mln was marginally above the $15.3 mln in 2016 and the slow growth is reflective of the difficult operating environment, reduced demand for insurance products due to low disposable incomes and declining rentals and revenue due to increased voids.
In terms of operations, the Domestic reinsurance operations GWP was at $6.5 mln compared to $7.7 mln in 2016 which is largely indicative of low economic activity, softening of rates and increased retention by cedants. The recovery at Baobab Reinsurance Private Limited continued following the 2015 recapitalization and the ongoing restructuring.
Profit for the period increased 1875% from $0.2 mln in 2016 to $4.1 mln due to the adoption of improved underwriting standards, increased retention and a 69% growth in investment income.
Regional reinsurance operations posted an overall loss of $0.4 mln compared to a Profit of $0.5 mln in the same period last year mainly due to slowdown in the performance of the Mozambican and Malawian economies. Emeritus South Africa is currently winding operations and contributed to the loss.
GPW declined 9% to $8.9 mln from $9.7 mln which was reflective of low economic activity in those markets.
Profit from the Property segment was flat on prior year at $0.6 million. Net share of associates was a positive $0.7 mln.
Meanwhile, Kumalo said the re-branding of reinsurance operations has been two phases with the first phase set to commence with the mono branding of the reinsurance operations.
During the period, reinsurance operations Baobab was granted a composite licence by the Insurance and Pensions Commission (Ipec) and the measure according to Kumalo is being implemented in tandem with the review of capital structures to ensure efficient utilisation of capital.
