UGI Malawi rebounds as Nicozdiamond records profit in FY17….Process to merge with Tristarinsurance commences
By Insurance24
HARARE, A rebound in United General Insurance (UGI) Malawi and a modest growth by the Company (Nicoz Zimbabwe) lifted short term insurer, Nicozdiamond performance during the year ended 31 December 2017.
Group chairman James Karidza in statement of the financials said the performance of UGI Malawi recovered from its worst performance in 2016 on the back of an improved economy and turnaround strategies embarked upon.
As a result, group total comprehensive income for the year amounted to $2.97 mln, an increase from $52,507 in 2016.
“This was largely buoyed by the good performance from the Company which posted a profit after tax of $2.44 mln compared to $1.75 mln in prior year,” Karidza said.
Gross premium written increased 9% to $40.19 mln from $36.99 mln last year as both company and UGI Malawi achieved modest growth during the year.
The group enjoyed a favorable claims experience resulting in a 6% reduction in claims incurred.
Operating expenses increased 13% to $25.28 mln from $24.28 mln fueled by the rising inflation especially in Zimbabwe while on other hand Malawi incurred restructuring costs which are expected to result in cost efficiencies sin future.
Group investment income grew 75% largely coming from good returns from the equities and fixed income securities which improved significantly last year.
Karidza said the Company did not register much movement on its properties portfolio while all associates investments contributed positively to group profitability, but overall were affected by the loss on disposal of some associates.
Group cash generated from operations amounted to $2.37 mln, a 163% increase from prior year and this was largely a result of improved premium collections by the company.
The Company according to Karidza was capitalized at $14.7 mln, above the minimum statutory requirement of $2.5 mln for short term insurers. UGI Malawi was however still below the minimum required solvency in the market, thus pointing need for recapitalization.
Meanwhile, the process to merge Nicozdiamond and Tristarinsurance has commenced according to Karidza. This follows the acquisition of 80.92% stake in the company by First Mutual Holdings.
