Fidelity reports profit slump
BUSINESS REPORTER
Fidelity Life Assurance of Zimbabwe Limited’s net profit fell 78% to ZWL$209.51m in the year to December 31, 2022 from ZWL$945.01m achieved in the previous year as expenses increased caused by the high inflationary environment, board chairman Livingstone Gwata has said.
Total income for the group grew by 45% in inflation-adjusted terms to ZWL$16.5bn from ZWL$11.3bn recorded in the prior year.
Gwata said: “The strong income growth was underpinned by core business net premium written and investment income which increased by 230% and 475% respectively.”
The growth in net premium written from ZWL$982.1m recorded in the prior year to ZWL3.24bn was above the inflation rate which stood at 243.76% as at 31 December 2022.
“The growth is premised on regular reviews of recurring premiums, product modifications, new market segments and leaning towards generating US$ revenue to keep up with the volatile economic environment. The gains on investment property show the reflective nature of this asset class in response to the macroeconomic sphere,” Gwata said.
On an inflation-adjusted basis, Fidelity’s total benefits, claims, and other expenses increased to ZWL$15.67bn from ZWL$10.06bn on the back of significant movements in actuarial liabilities reflecting the growth in assets backing the policyholders’ liabilities.
The net claims ratio closed the year at 41%, whilst operating and administration expenses were on the increase driven by the obtaining inflationary pressures.
Gwata said Fidelity continued to prioritize product innovation and access to new market segments.
“Deliberate focus was put towards understanding both broad and individual needs of selected market segments and this resulted in the development and introduction of a wide array of tailor-made products during the year.
“In support of the product offering and rollout, the group pursued an aggressive digital strategy to ensure maximum leveraging of best-suited technological systems and platforms.
“Value creation, growth, and preservation of policyholders and shareholders’ investments remained at the centre of all our operations,” Gwata said.
Fidelity has since registered a Real Estate Investment Trust to spearhead value creation and infrastructure development through public and private partnership projects.
Gwata said diligent updating of products and services enabled the group to remain relevant and served well in buttressing the continued business growth.
It comes after Zimre Holdings Limited (ZHL) acquired a controlling stake in Fidelity.
“Following the integration of the business into the ZHL Group, Fidelity has adopted the Eagle Culture as part of its transformational journey and service commitment.
The new culture aims at inculcating the characteristics of an eagle in daily operations with the ultimate objective of amplifying the business’ value proposition to all our stakeholders.
“At the core of the new culture is the desire to ensure long-term quality service delivery as part of the overall strategic intent,” he said.
