FMHL to consolidate risk business…moves to re-locate reinsurance business to Botswana.
By Insurance24
First Mutual Holdings Limited says it will looking at consolidating its risk business by romping in cotton famers after tobacco farmers brought in an excess of US$1 million in the interim period.
Gross premiums written in the 6 months to June 30 2018 increased 15% to US$8,3 million from US$ 7,2 million same period last year while the claims ratio declined 3% to 25% from 28% same period last year.
FMHL holdings CE Douglas Hoto said of these premiums in excess of US4, 1milion was from tobacco farmers.
The life assurance business recorded a 15% increase driven by 48% increase in mobile base de-FML product and traditional FCP which grew by14%.
Hoto said growth in two products was mainly driven by agriculture business while the 3% reduction in claim ration was due to favorable claims experience across all risk products.
“You will realize that the performance of risk business was mainly driven by tobacco insurance.
These farmers pay once in a year there is a plan to go into insuring cotton farmers who are focused with aggregate selling pints,” he said.
Farming insurance is currently gaining momentum with a number of unforeseen events happening leading to an upsurge in insurance uptake.
Overall the group is also is making sustained progress on issues that are material including maximization of use of digital technology which holds significant potential to increase the level of interaction with clients process efficiencies and savings.
During the period GPW went up 40% mainly driven by acquisition of NDIL, health insurance, pension and savings and life assurance.
On other hand, the group is in the process of restructuring its reinsurance business, looking at establishing a Reinsurance Holdings Company in Botswana, with the aim of capital raise.
Units highlight.
First Mutual Health
• GPW went up by 6% to US$29.8million(HY2017:US$28.1million)driven by organic growth on corporate clients and acquisition of new business
• Claims ratio increased to 83.81% (HY2017:81.91%) as a result of increased drug prices due to shortage of foreign currency
• Operating profit declined by 35% attributable to increase in claims ratio
• Business continues the implementation of biometric claims administration system countrywide to improve customer convenience and enhance efficiency of claims processing and settlement.
First Mutual Life
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Overall operating profit increased by 108% owing to higher earned premium, and favourable claims experience under shareholder business risk. Pensions & Savings–Policy holder(PH)
• GWP was 24% higher than same period last year driven by higher single premiums.
• Group pension recurring business grew by17% contributing to the increase in policy holder business
First Mutual Reinsurance
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GPW for the period declined by 26% to US$8.6 million (HY2017: US$11.6 million)
• Reduced regional business of US$0.3 million (HY2017: US$0.8 million) due to challenges in remitting foreign commitments
• Lower agriculture business of US$1.5 million (HY2017: US$4.0 million)
• Improvement in the claims ratio from 82% in June 2017 to 65% driven by lower agricultural losses.
Reduction in operating losses attributed to reduced agriculture losses noted above
FMRE P&C Botswana - 56%growthinGPW
• Positive out turn in regional business in markets such as SouthAfrica, Zambia and Namibia
• Operating profit went up 41% owing to a combination of lower claims ratio and higher net premium earned
• Business continues to focus on premium growth both from local and
regional markets.
Nicoz Diamond
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4%growthinGPWtoUS$19.3million(HY2017:US$18.6million)
• Motor class contributed 51% to GPW (HY2017:42%)
• Claims ratio went up to 51% from 46% drivenby:• Operations of TristarInsurance currently being merged with those of NicozDiamond and the two companies operated as standalone units to 30June2018 Tristar Insurance
• GPW grew by 33% to US$3.4
• Motor continues to be the dominant class with GPW contribution of
60% (HY2017 :63%)
• Increase in operating loss to US$0.4 million from US$0.1 million
First Mutual Properties
• Revenueforthesixmonthsincreasedby7%toUS$4.0million
• Operating profit was 10% higher driven by higher rental income,lower provision of credit losses and lower property expenses
• Occupancy level improved to 74.84%(HY2017:73.54%)owing to significant leasing efforts
• Rental yield grew to 6.76%(HY2017:6.34%)and average rental/square
metre increased toUS$7.61(HY2017:US$6.94)
First Mutual Wealth
- Achieved investment fees of US$0.6million (HY2017:US$0.7million)which resulted in lower operating profit of US$0.02million compared to US$0.1million in 2017
