Fidelity Life Assurance premiums dip as new business drives Vanguard Life Assurance

Fidelity Life Assurance premiums dip as new business drives Vanguard Life Assurance

By Insurance24

HARARE, Fidelity Life Assurance of Zimbabwe group gross insurance premiums for 2017 at $14.24 mln were 7% lower than $15.38 mln in 2016 largely on shrinkage of the business by the anchor company.

Fidelity’s 2017 financial year was characterized by a restructuring exercise that was aimed at re-positioning the group; as a result, total revenue amounted to $55.94 mln, a 7% increase from $52.36 mln during prior year.

During the year, sales of stand from the South View Park project were lower 4% at $23.4 mln against $24.2 mln in prior year.

“These reductions in core income were however cushioned by significant increases in investment income, the most significant being fair value gains of $4.5 mln recorded on listed equities, compared to $0.6 mln in 2016,” group chair Fungai Ruwende said in a statement of the financials.

Claims for the group reduced 41% from $8.3 mln to $4.9 mln. Consequently, the group closed with a loss for the year after tax of $1.3 mln against restated profit for 2016 of 6.4 mln.

Fidelity Life Assurance which is the group anchor company saw premiums reducing 17% to $10.8 mln from $12.9 mln in 2016. Growth of the anchor company was hampered by organic shrinkage of the business of its clients through downsizing, restricted uptake of assurance products and assurance premiums.

The flagship company closed the year with a 101% reduction in profit for the year, at a loss of $0.06 mln and this was mostly due to the asset write offs and impairments.

In Malawi Vanguard Life Assurance recorded an increase in premium, arising from growth due to new business.

Premium income increased 40% to $3.5 mln from $2.5 mln in 2018.

“Despite the increase in premium, VLA reported a loss for the year at $0.6 mln compared to a restated profit of $nil in 2016. The loss is predominantly to an increased estimate of insurance contract liabilities,” said Ruwende.

The group is cautiously optimistic of the future though having seen potential for growth due to new executive and management.