Fidelity maintains growth momentum
DIVERSIFIED insurance group, Fidelity Life Assurance of Zimbabwe maintained a growth trajectory during the year to December 31, 2023 anchored by organic growth of the existing book as well as the acquisition of new business.
Despite a challenging environment experienced during the year, the group also expanded its distribution channels through both traditional and digital means to provide convenience and enable ease of doing business with its various stakeholders.
“Products for the policyholders continued to be improved and enhanced in response to evolving policyholder expectations as well as conditions obtaining in the environment,”said group chairman Mr Livingstone Gwata.
“Creativity and innovation were also extended to the choice of our markets and investments as we sought to create and preserve value for our policyholders and shareholders. One of the flagship investments was the registration of a Real Estate Investment Trust (REIT) which has since been awarded Prescribed Asset status,”said Mr Gwata.
During the period, Fidelity’s profit for the year surged by 9 945 percent to $101 billion driven by growth in insurance contract revenue and investment income.
Insurance contract revenue recorded a strong growth of 242 percent compared to the prior year to $116,6 billion from $34,1 billion recorded in the prior year.
“The impressive growth in insurance contract revenue was on the back of the group’s innovative product development bearing fruits and increased uptake of the company’s products offering on the market.
“Significant growth in premium inflows was witnessed through the Vaka Yako product contributing 83 percent of the Individual life premiums,” Mr Gwata added.
The Zimbabwe operation contributed 62 percent from 56 percent in the prior year while the Malawi operation accounted for 38 percent from 44 percent in 2022.
Insurance service grew by 280 percent on an inflation-adjusted basis and increased by 1598 percent under historical cost underpinned by real growth in insurance contract revenue.
This, the group indicated, is despite an increase in insurance service expenses propelled by the increase in claims and directly attributable costs due to the inflationary environment prevailing in Zimbabwe and the regional business operation.
According to the group, net investment income grew by 91 percent to $70,8 billion compared to the prior year’s $37 billion driven mainly by fair value gains from investment property, equities and interest income from money market investments.
While the global space is likely to remain challenging due to geopolitical tensions that have the potential to cause far-reaching adverse effects in terms of food shortages, supply chain disruptions and rise in global petroleum products which in turn can cause an increase in production costs and cause volatility in international markets globally the group is prepared to cushion itself against these and other local challenges.
Locally, the group is also working flat out to address challenges such as currency volatility, exchange rate fluctuations and inflationary pressures and their impacts on consumer disposable incomes.
The central Government remains committed to the attainment of the Vision 2030 goals under National Development Strategy (NDS1) and NDS2 through various projects which include among others infrastructure projects in road and dam construction and rehabilitation, as well as irrigation projects.
“The business remains on high alert to these activities and will continue to monitor and carefully adapt to these changing circumstances to deliver value to its key stakeholders.
“The business will be preserving its cash wallet through responsible spending and targeted investment into products that survive the test of time. Innovation will be key in also driving the products that create and preserve shareholder and policyholder value,”said Mr Gwata.