BUSINESS REPORTER
Fidelity Life Assurance’s profit in the six months to June 30,2021 plummeted to ZWL$320, 370 from ZWL$1.21bn reported in the prior comparative period last year as the listed life assurer took a hit from exchange rate differences.
“The depressed profitability for the group is as a result of a decline in exchange rate differences arising from translation of foreign operations and foreign currency denominated assets due to stabilisation in the exchange rate which were experienced in the current year,” board chairman Fungai Ruwende said.
He added: “The nearly stagnant official exchange rate and generally depressed property market implies minimal capital appreciation on investment property. Fair value gains on investment property will thus have reduced impact on profitability in the current year in comparison to the prior financial year.”
Total income plunged 67% to ZWL$933.8m in the reviewed period from ZWL$2.83bn.
Total assets shrunk marginally to ZWL$6.605bn from ZWL6.606bn in 2020.
Total liabilities stood at ZWL$5.69bn compared to ZWL$5.72bn in 2020.
The group recorded net premium written in inflation-adjusted terms of ZWL$441m, an increase of 102% from ZWL$218.3m recorded prior year with the growth mainly attributable to responsible reviews of recurring premiums, new business acquisition and organic growth from the existing book.
The life insurance businesses continue to be the major contributor to total core income growth contributing 83% of total core income.
On an inflation-adjusted basis, total benefits, claims and other expenses declined by 43% to ZWL$920.2m in the reviewed period from ZWL$1, 60bn reported in the same period last year.
Ruwende said remained focused on execution of its stated strategic initiatives across all business units, despite the challenges brought on by the various Covid-19 lockdowns.
“We will continue to strive towards ensuring that we diversify the revenues we earn, and have a good balance between US$ and ZWL$ revenue. This is across all our business units,” he said.
The group realised savings on the Southview water pipeline project, with project costs incurred during the period decreasing by 92% to ZWL$39.1m current year from ZWL$467.7m prior year as the project reaches its tail end.
Ruwende said Fidelity will continue to strengthen its balance sheet and capital position and this will provide protection against adverse future events and support business growth.
He said Fidelity conducted an asset separation exercise which sought to separate the assets of policyholders and shareholders to ensure compliance with the requirements of the Insurance Act (Chapter 24:07) and the Pension and Provident Funds Act (Chapter 24:09).
