Taurai Mangudhla
Listed life group, First Mutual Holdings Limited (FMH), has reported a 35 percent growth in after-tax profit to $5 million for the first five months of 2018, compared to the same period last year on account of growth in gross premiums written (GPW) and declining costs.
GPW stood at $70,5 million, which was 12 percent above the $63 million reported in the same period last year, CEO Douglas Hoto said in a trading update at the company’s annual general meeting this afternoon.
A 12 percent growth in net earned premium to $58,7 million was reported for the period under review.
Hoto said total direct expenses, comprised of claims and commissions, went down 9 percent to $43,8 million.
Rental income went up by 7 percent to $3,1 million while other income grew 41 percent to $439 000. Operating profit, Hoto said, was 66 percent up to $3,5 million. Total investment income remained flat at $5,5 million, but investment income attributable to policy holders grew 25 percent to $3,4 million.
Of the $5 million after tax profit, $4,6 million is attributable to equity holders of the parent company, while the balance is attributable to non-controlling interest.
The positive performance comes as FMH moves to conclude full acquisition of Nicoz Diamond (Nicoz).
The group recently announced to shareholders it had received regulatory approval for the acquisition of the entire issued share capital of Nicoz. Accordingly, Nicoz will become a subsidiary of FMH.
FMH recently said the operations of Nicoz and Tristar Insurance Company Limited will be merged through the acquisition of Tristar by Nicoz, or through any other appropriate mechanism.
Hoto told Business Times the group is moving to conclude the transaction as per initial intent, with a scheme meeting slated for June 28.
“We will buy the remaining 19 percent and the shareholders can also get FMH shares. We are doing exactly what we said in the beginning except there has been a bit of a delay,” Hoto said.
In its latest annual results for the year ended December 2017, the group, including consolidating Nicoz, achieved a 7 percent GPW growth to $124,9 million for the year. The GPW growth was driven by the health insurance business and property and casualty segments. Overall, the group achieved a profit for the year of $12,2 million, up from$9,3 million in 2016.
