Insurance giant, First Mutual Holdings Limited (FML), reported gross premium written (GPW) for the year to December 31, 2021 rose 2 percent to $5,9 billion from $5,8 billion as a result of organic growth on the existing portfolio and the continuous revaluation of insurance policy values in line with inflation to ensure clients had adequate cover.
Net premium earned was almost flat at $4 billion.
At $257 million, rental income was ahead of prior year by 9 percent and group chairman Amos Manzai attributed the growth to quarterly rental reviews and increases in occupancy rates in retail and residential properties.
The group achieved investment income of $346 million for the year under review compared to an investment loss of $1,8 billion in 2019.
The investment gains were driven by fair value gains on listed and unlisted equities in line with the general performance of the Zimbabwe Stock Exchange (ZSE) Industrial Index.
“The group has maintained its position that, in times of turbulence, quoted equities remain a viable long-term asset class and will continue to diversify its real assets portfolio with investments in areas such as private equity and property.
“Prudent asset class selection amongst these real assets is required in the future should the stability of macro-economic variables remain uncertain,” he said.
At First Mutual Life Assurance Company, GPW went down 38 percent to $523,3 million partly due to below inflation adjustments to basic salaries that drive the employee benefits (pensions and group life assurance) division.
Revenue growth was also negatively affected by the slow pace in increasing life cover amounts in the individual life division.
Its health business, First Mutual Health Company recorded a 23 percent growth in GPW mainly due to increases in ZWL member contributions as the company sought to reduce shortfalls and align tariff rates to inflation and thus reduce shortfalls.
According to the group, the company also experienced growth in foreign currency denominated premiums, which tend to have lower shortfalls.
Claims ratio decreased from 76,64 percent to 73,12 percent owing to limited access to some discretionary procedures such as dental treatment during the lockdowns.
GPW at NicozDiamond grew by 3 percent to $2,1 billion driven by asset revaluations to protect clients against insurance value erosion by inflation and organic growth within the existing portfolios.
At Diamond Seguros, GPW grew by 20 percent on the back of improved broker business due to improved confidence after re-capitalisation of the business. At 20 percent, claims ratio was lower than the comparative period of 33 percent due to the lockdowns.
According to the group, Diamond Seguros turned around from a loss position of US$135,000 in 2019 to a profit of US$153,000 in 2020.
During the year under review, First Mutual Reinsurance Company Limited recorded GPW decreased by 48 percent to $365,5 million mainly due to increased retention levels by cedants following the introduction of the Zimbabwe dollar as the sole currency in June 2019.
First Mutual Properties Limited recorded revenue marginally increased by 2 percent to $265,7 million in 2020 on rental reviews.
Independent investment property valuations as at December 31, 2020 resulted in increases in the investment property portfolio value.
While the economic environment remains challenging worsened by Covid-9 pandemic, Mr Manzai says the group will leverage on its diverse business portfolio, strategic partnerships, as well as its regional footprint to sustain a positive growth trajectory into the future.
The group resolved that a final dividend of $50 million, being 6,88 cents per share be declared.