ZB Insurance profitable in 2017 on improved product penetration

ZB Insurance profitable in 2017 on improved product penetration

By Insurance24

HARARE, ZB Financial Holdings net earnings for the insurance business for the year ended 31 December 2017 increased 9% to $9.6 mln compared to $8.8 mln in 2016 on the back of improved product penetration in the life assurance business and a flat outturn on expenses.

During the period, gross insurance premium income amounted to $30.8 mln, an increase from $29.8 mln prior year comparable. Expenses were near flat at $21.2 mln compared to $21 mln in 2016.

       

Group chief executive officer Ron Mutandagayi at an analyst briefing for the financials said ZB Life Assurance premiums firmed with gross life premiums increasing in response to improved product penetration driven by the recruitment of more agents.

Life Assurance Premium increased 9% to $11.70 mln compared to $10.72 mln, while the expenses rose 7% to $5.29 mln from $4.96.

“The technical assurance result improved by 11% on the back of 2.2% improvement in the related expenses ratio from 46.3% to 45.2%.  Annual performance for the past 3 years exhibit a steady and sustainable growth pattern,” he said.

ZB Reinsurance business remained flat with premium at $19.10 mln while expenses were also in a marginal decline to $15.92 mln.

“Reduction in local premiums was offset by an increase in premiums from the region whose contribution increased from 21% to 25%.  Technical expenses reduced marginally in tandem with a satisfactory claims outturn.  Technical results, however, exhibit mild volatility over the last 4 years,” said Mutandagayi.

On other hand, the CEO said satisfactory progress has been made in the implementation of the new life policy administration system.

He said parallel runs are underway with go-live having been scheduled for the end of the first quarter with the system expected to improve efficiencies as well as enhance customer interactions.

Mutandagayi said regional operations have continued to contribute a significant portion of reinsurance premiums at 25% (FY16 – 21%) but establishment of physical presence in the region remains constrained by the shortages of foreign currency.

Overall, the Group posted a net profit of $15.5 mln in 2017 compared to $11.4 mln  prior year comparable.