First Mutual, IPEC settle asset separation dispute
LIVINGSTONE MARUFU
First Mutual Life Assurance Company Limited (FML) has reached an agreement with the Insurance and Pensions Commission (IPEC) over the asset separation exercise, bringing an end to a long-standing dispute between the two parties.
The disagreement arose after a forensic audit found that FML had not properly separated assets between policyholders and shareholders, potentially exposing policyholders to losses. FML initially disputed the findings but was eventually ordered to pay US$53 million and subsequently agreed to comply with the audit’s recommendations.
In a statement accompanying the group’s half-year results for the period ending 30 June 2025, chairman Amos Manzai said he was satisfied with the progress made.
“FML is working with the Insurance and Pensions Commission to bring finality to the issues that arose during the forensic audit. Following the withdrawal of the Corrective Order, FML and IPEC entered into a settlement agreement and undertook to take certain steps to resolve the outstanding issues, including the appointment of independent experts to consider some aspects,” Manzai said.
He added that these tasks had been concluded.
“IPEC subsequently asked FML to resubmit some information that had already been supplied and to provide some additional information. This was done and parties are conducting some reconciliations ahead of the anticipated conclusion of the matter,” he said.
The group’s performance was underpinned by a strong preference for USD-denominated products, which contributed 80% of total revenue for the six months ended 30 June 2025, up from 78% in the same period in 2024. Clients continued to favour USD products, seeking stability and certainty in the event of a claim.
“Insurance contract revenue for the period grew by 19%, to US$87.7 million during the six months of 2025 from US$73.5 million recorded during the same period in 2024 due to increased uptake of the group’s insurance policies, as well as upward revisions of sums insured on ZWG-denominated policies—a mitigatory response to value erosion,” Manzai said.
FML’s rental income grew marginally by 1% to US$4.3 million, while fair value gains on investment property reached US$1 million, recovering from a US$32.7 million loss in 2024. The 2024 loss was largely non-operational, driven by artificial investment property adjustments.
Manzai explained that independent valuations on 1 January 2024 did not fully adopt the official exchange rate due to its limited applicability in actual market transactions, resulting in inflated opening balances that did not reflect true market asset values. This was corrected during the period under review, and the group reported a consolidated profit after tax of US$6.2 million, rebounding from the prior year’s loss.
The group’s total assets increased by 4% to US$266.8 million compared to US$256.8 million at 31 December 2024, driven by net fair value adjustments on investment properties. Liabilities rose by 2% to US$169.3 million, mainly due to higher insurance contract liabilities from increased uptake of the group’s policies.
Following the strong half-year performance, the group declared a dividend. Looking ahead, FML will focus strategically on increasing the contribution of its regional operations to provide a strong foundation for sustainable growth and long-term value creation for all stakeholders.
