HARARE, Insurance Company, Nicoz Diamond says the insurance sector continues to face a protracted soft market cycle that has seen clients continuing to negotiate for reduced covers and lower premium rates.
As a result, the Group’s revenue for the four months to April 2017 grew a marginal 1% with Gross Premium Written (GWP) for the period at $15.7mln compared to $15.6mln same period in 2016.
Group managing director Grace Muradzikwa told shareholders at an annual general meeting on Tuesday that the group’s revenue remained resilient despite a number of challenges facing the economy.
“Even though some regulatory and related changes made in 2016 increased the cost of doing business for the sector and the company in particular, we did all we could to ensure that expenses remain aligned to revenue and this shall continue to be an area of focus,” she said.
Muradzikwa added that in an environment with incessant liquidity problems, premium collection has remained a challenge and to facilitate ease of payments the company has deployed point of sale machines throughout its branches nationwide as well as mobile transfer options are in place.
During the period the company had a favourable loss experience of 43% as risk management initiatives implemented started bearing fruits but this compares favourably with a loss ratio of 46% in April 2016.
Claims amounting to $2.7mln were paid and Muradzikwa said this was done with ease given the company’s stringent liquidity management processes.
Expense ratios were down to 31% compared to 32% in April 2016 as the company heavily focuses on expense management.
According to Muradzikwa, operating cash flow for April was positive, as a result, GWP as at May 2017 is up 11% at $19.5mln from the 2016 figure.
Meanwhile, the company says is obtaining good rental yields from the completed phase of Diamond Villas. The final phase of the project was completed in 2016 but leasing was delayed by the connection of key utilities.’
“The units are now expected to be fully leased out from 1 July 2017. Additionally, the company has put the disposal of the units on hold to maximise on rental returns whilst preserving value until the market conditions present lucrative opportunities to dispose.
In the region, Diamond General Zambia and UGI Malawi traded in the 4 months but Diamond Seguros Mozambique is still in negative territory.
Muradzikwa said all the three regional markets are still volatile and characterised by high inflation and exchange rate depreciation.
She said the company will going forward ensure that UGI Malawi contributes positively in 2017 while for Diamond Seguros Mozambique and Diamond General Zambia will be capitalised with the companies at various stages of potential investor engagements.
