FBC Insurance focuses on product development
FBC Holdings Limited says its insurance business has remained focused on product development and penetrating new market segment despite the operating environment which has negatively affected the uptake of insurance products.
In its HY2021 results the group said it had accorded special focus on micro insurance.FBC group chairperson Hebert Nkala said the group’s net insurance premium earned was 40% ahead of the same period last year, at ZWL635.16 million as the insurance portfolio has remained susceptible to the subdued economic activity and general reduction of consumer disposable income.
Nkala said the sustained inflationary environment in the past years has negatively affected the uptake of Insurance products due to lower disposable incomes.
Following a return to multi – currency, the Insurance and Pensions Commission (IPEC) authorized Insurance Companies to underwrite insurance in foreign currency.
Insurance businesses remain focused on product development and penetrating new market segments, with special focus on micro insurance Zimbabwe’s Insurance Industry remains challenging on the backdrop of economic volatility and the Covid-19 pandemic.
“This has provided the industry with the capacity to hedge against inflation and exchange rate volatility. In response to current market dynamics, the Group’s insurance businesses remain focused on product development and penetrating new market segments, with special focus on micro insurance,” he said.
Nkala said as the economic outlook for the near term is optimistic, there were hopes that the on-going inoculation exercise will result in significant progress towards the attainment of national herd immunity thresholds and lead to the gradual relaxation of Covid-19 induced restrictions.
He said downside risks relate to the possible resurgence of new Covid-19 variants which pose potential threats to both humanity and economic activity.
Despite the negative impact of Covid-19, Group financial performance showed resilience, registering a profit before tax of ZWL1.16 billion and an after tax profit of ZWL529.14 million.
This performance was largely anchored on the Group’s core business revenue lines which accounted for 66% of total income.
“The Group’s strategic thrust of intensive investment in digitalisation and hedging strategies contributed largely to overall performance.
The Group achieved a total income of ZWL4.75 billion for the period, representing a 34% decline from the prior year’s corresponding period performance.
The Group’s subdued total income outturn was largely influenced by a 76% reduction in net trading and dealing income, following the stabilization of the ZWL interbank exchange rate against all the major currencies, bolstered by the foreign exchange auction system, “Nkala said
The significant reduction in this revenue line was counter balanced by a strong growth in other core business revenue streams.
Net interest and related income was 43% ahead of the prior year’s corresponding period, at ZWL1.33 billion, leveraging on the Group’s 12% growth in loans and advances while the Group reduced its minimum lending rate during the period under review in order to assist customers in coping with the Covid-19 induced low economic activity and reduced demand