Old Mutual Zimbabwe gross premium written (GWP) decline 2% in H1 2017, but group remain profitable

Old Mutual Zimbabwe gross premium written (GWP) decline 2% in H1 2017, but group remain profitable

Insurance24 reporter

HARARE, Diversified financial services group and Insurance giant Old Mutual Zimbabwe says all business units performed strongly during the first half 2017 period ended 30 June 2017 and the momentum will carry over during the second half to deliver a positive year ending.

Group chief executive officer Jonas Mushosho presenting the company’s financials for the period said group profitability during the interim period reflects the diversification of the group’s operations.

“We believe we have delivered good results and looking at performance, Gross Written Premium (GWP) for our two insurance businesses General Insurance and Life Business totalled $100.8 mln but 2% down from last year due to two factors,” he said.

Mushosho, these he said included that the annuity business went down because the number of company closures and retrenchments this year are significantly lower than same time last year.

On the general Insurance, he said, “We have seen the tendency of people lowering the value of the sums insured but we believe that before we get to the end of the year, we should have turned around the GWP.”
During the period, Non-Life sales which apply to sales in asset management business, property and unit trusts had strong inflows at $153 mln, a 3% growth over last year.

“This was driven mainly by the preference for safe haven status by many people during uncertain times and also just indicated the fair amount of liquidity amount they seek safe haven for and this indicates our prowess for those e funds,” he said.

Life sales at $10.4 mln were 5% lower and Mushosho said on the wholesale side, there was significant growth on wholesale sales but the retail side declined, reflecting the difficulties that individuals and households are going through.

Meanwhile, the adjusted operating profit (AOP), which highlights the performance of the Group’s core business operations, was $36.8 mln, which is a growth of 11% on 2016, buoyed by life assurance and asset management profits.

He said Life profits were driven significantly by improved risk profits as a result of an improved claims ratio. In addition, capital charges on funds administered, increased on the back of a higher asset base following the performance of the ZSE.

In terms of profitability split, the banking unit Cabs contributed 45% at $16.5 mln followed by Life at $13.5 mln which was 36%. Asset management and general insurance contributed 10% and 9% at $3.6 mln and $3.2 mln respectively.

Group revenue grew 175% to $384.9 mln compared to $139.8 mln in H1 2016. Total assets increased 10% to $2.4 bln mainly due to the growth in investments and securities while total liabilities grew by 8% which was largely attributable to the growth in policyholder liabilities, in line with the growth in matching assets.

Total actual claims paid in the life business were 10% below prior year with total wholesale benefits at $48.8 mln compared to $55.8 mln in 2016.

In the general insurance business however, total claims expenses were 17% above prior year with the main contributor being motor class claims as a result of the heavy rains experienced in the first half of the year.