Listed life assurer, Fidelity Life Assurance of Zimbabwe, recorded a 16% slump in revenue to ZWL$326.1m in the first quarter to March 31, 2021 from ZWL$387.5m reported in the prior comparative period due to the decrease in investment income.
“The decrease in total revenue was as a result of a 66% decrease in investment income, itself mainly driven by investment property fair value gains. Property fair value gains are computed in relation to movement in exchange rate, which grew by less than inflation rate,” Fidelity Life Assurance company secretary Chipo Matongo said in a trading update for the quarter.
Total expenses for Fidelity, which operates three insurance businesses, Fidelity Life Assurance, Vanguard Life Assurance and Fidelity Funeral Services, and other subsidiaries, that provides micro lending, medical aid, asset management and actuarial services, grew by 12% to ZWL$187.1m from ZWL$167.8m recorded during the same period last year.
Matongo said expenses were largely driven by the changes in insurance liabilities which constituted 47% of the total expenses in the reviewed period compared to 45% in the same period prior year.
The group posted profit before tax of ZWL$139m for the period ended March 31, a decrease of 37% as compared to ZWL$219.7m posted in the same period last year.]
The group said the improved rollout out of vaccination programmes has raised hopes of a turnaround in the pandemic later this year, though new waves and variants of the virus pose concerns for the outlook. Expectations of a bumper maize harvest have raised hopes of an agriculture-led economic recovery in 2021, Fidelity said.
Given the low economic base resulting from two consecutive years of economic decline, marginal economic growth is expected in 2021, the company’s strategic focus remains on value preservation for the key stakeholders which includes policyholders, clients, shareholders and employees, it said.