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Fidelity Life mourns “difficult’ operating environment as FY2016 profit slumps

Insurance group, Fidelity Life  Assurance of Zimbabwe full year net profit fell by almost half to $2,3  million for the full year to December 31, 2016 compared to the previous year.

The firm recorded an after tax profit of $5,2 million in 2015.  In the period, the group saw its gross premium sliding to $15,3 million  from $17,2 million in 2015 while total revenue slumped to $36,5 million from $52 million.

Group chairman Fungayi Ruwende said the insurance sector continued to  be affected by high claims, low uptake of products, cancellations and  failure by employers to remit workers contributions.

“The difficult operating environment impacted on the group’s premium  income and collection ability,” he said.

The group opted not to declare a dividend, preferring to “preserve  internal resources to fund group operations.

During the year, Fidelity saw insurance claims going up by more than $500 000 to $7.2 million while revenue from housing project, Southview  Park was down to $36,6 million.

In terms of subsidiary performance, the group’s key subsidiary,  Fidelity Life Assurance recorded an eight percent drop in premiums to $12,4 million while the Malawian subsidiary, Vanguard Life Assurance’s  premium was down 24 percent to $2,5 million.

The group’s micro-finance unit upped its performance with profit  surging to $1 million from $0,38 million in 2015. Mr Ruwende said the company would likely perform better this year in line  with anticipated overall economic performance where the gross domestic  product is forecast to grow by 3,7 percent.- New Ziana

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