HomeBusinessFidelity Life profits balloon to $588 million

Fidelity Life profits balloon to $588 million

BY FIDELITY MHLANGA

ZIMBABWE Stock Exchange-listed Fidelity Life Assurance (FLA) registered a profit of $587,7 million, a jump  from the $21,6 million posted the prior period driven by growth in revenue and property fair value adjustments.

Total inflation-adjusted revenue for the period to June 2020 increased by 162% to $1,37 billion  from $523,2 million recorded in 2019 boosted by fair value gains on investment properties, which increased from $250,7 million in June 2019 to  $975,1 million.

The group’s inflation-adjusted expenses for the period to June 30 grew by 58% to $775,9 million from $490,3 million recorded in the same period due to an increase in total expenses.

Insurance and investment contract liabilities increased from $143,1 million in June 2019 to $402,3 million in June this year.

“The disciplined execution of the group strategy has significantly contributed to the positive performance experienced during this half year,” group chairman Fungai Ruwende said in a statement accompanying the half-year results.

“The group’s strategy remains grounded in the three strategic pillars of sound corpoarte governance, brand repositioning and growth, as laid out in January 2018,”

The group’s total assets grew by 72% in real terms from $2,7 billion as at December 31 2019 to $4,63 billion as at June 30, 2020.

A significant driver of the growth was revaluation of investment properties and equity investments.

Insurance companies are required to hold minimum regulatory capital of $75 million as per Statutory Instrument 95.

Fidelity had excess assets of $404,4 million as of June 30, implying a healthy solvency ratio of 609%.

“For the life assurance business, the new Risk-Based Capital Framework (Zimbabwe Integrated Capital and Risk Project — ZICARP) comes into effect on 31 December 2020 and initiatives are underway to ensure full compliance,” Ruwende said.

He said the digitisation strategy implemented in 2018 cushioned the business from the full impact of Covid-19 on the business continuity and service delivery with the company managing to provide seamless and cost-effective services to its clients and stakeholders through the support of a robust work-from-home programme by staff members and automated systems.

“The business also accelerated some key deliverables of the digitisation project, which will see the implementation of the contact centre being brought forward to buttress the digitalisation efforts underway,” Ruwende said.

“In addition to the existing digital services which includes the Fidelity Life App for life assurance customers, the Health & Lifestyle Management App for our medical aid members, the online payment functionality and a suite of social media platforms, which allow for real-time communication with clients, FLA enhanced its WhatsApp for business platform to allow customers to make payments and apply for new policies and services.”

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