Staff Writer
First Mutual Holdings Limited (FMHL) more than tripled its earnings in the first five months of 2026 after a sharp rebound in investment income offset rising insurance claims and operating costs, underscoring the resilience of the diversified financial services group’s business model.
The insurance and investment group reported a 202 percent jump in profit after tax to US$10,02 million for the period ended May 31, 2026, from US$3,32 million in the comparable period last year, while profit before tax climbed 190 percent to US$10,85 million.
The performance, presented at the group’s annual general meeting, was largely driven by a surge in investment returns as FMHL capitalised on stronger financial markets, even as insurers continued to grapple with rising claims costs and higher policy acquisition expenses.
Net investment return soared to US$12,91 million from just US$268 000 a year earlier, providing the single biggest contribution to earnings growth and cushioning pressure on underwriting margins.
The results reflect the growing importance of investment income to Zimbabwe’s insurers, which increasingly rely on diversified income streams to sustain profitability amid a volatile operating environment characterised by elevated claims inflation, currency uncertainty and rising operating costs.
Despite the difficult environment, FMHL maintained steady growth in its core insurance operations.
Insurance contract revenue rose 11 percent to US$77,12 million, with all three insurance clusters posting double-digit growth.
Revenue from the Life and Health Insurance Cluster increased 10 percent to US$38,79 million, while the General Insurance Cluster expanded 13 percent to US$19,84 million.
The Reinsurance Cluster recorded 12 percent growth to US$18,49 million. Overall shareholder revenue rose 11 percent to US$83,59 million.
However, the increase in business volumes came with higher costs.
Insurance service expenses rose 19 percent to US$64,6 million, reflecting an 18 percent increase in incurred claims and insurance contract expenses as well as higher acquisition costs associated with new business.
Consequently, insurance service results before reinsurance declined 16 percent to US$12,52 million.
FMHL was nevertheless able to preserve underwriting profitability through improved reinsurance performance.
Reinsurance recoveries and commission income jumped 49 percent to US$10,75 million, while net expenses from reinsurance contracts narrowed significantly, helping lift net insurance and reinsurance performance by nine percent to US$11,42 million.
The group’s non-insurance operations also delivered a steady contribution to earnings.
Net rental income rose 19 percent to US$2,06 million, benefiting from the group’s sizeable property portfolio, while overall net operating income increased 35 percent to US$4,94 million despite a seven percent rise in administration expenses.
FMHL further strengthened its financial position during the review period.
Total assets increased seven percent to US$301,57 million from US$283,08 million at the end of December 2025, supported by a 30 percent increase in equity investments to US$56,06 million, an 18 percent rise in reinsurance contract assets and higher cash holdings.
Shareholders’ equity grew 11 percent to US$71,11 million, lifting total equity to US$115,61 million. Insurance liabilities also increased in line with business growth, with life assurance liabilities rising nine percent and short-term insurance liabilities advancing five percent.
The results suggest FMHL has entered the second half of the year with a stronger balance sheet and improving earnings momentum.
While higher claims continue to weigh on underwriting margins across the insurance industry, the group’s diversified portfolio spanning life assurance, short-term insurance, reinsurance, property and asset managementcontinues to provide multiple earnings streams capable of cushioning volatility in any single business line.
The performance also reinforces a broader trend within Zimbabwe’s insurance sector, where strong investment portfolios and property assets have become increasingly important drivers of profitability alongside traditional underwriting operations.
