• Loading stock data...

Latest News

– Herald

– Herald

Diversified insurance group, Zimre Holdings Limited (ZHL)’s profit for the year to December 31, 2020 doubled to $0,9 billion on account of the strong top-line business growth in some business units in the region.

Chairman Mr Ben Kumalo attributed the growth to investment portfolio fair valuations following the change of the functional currency in Zimbabwe.

The period experienced challenges emanating from Covid-19 impacts on businesses, but the group put in place strategies for survival such as optimisation of technology.

“The outbreak of the Covid-19 pandemic forced the group to invest in and accelerate the digitalisation strategy, improve customer supply chains, augment existing internal and external communication as physical interactions were restricted.

“Business continuity plans implemented during the lockdowns ensured the continuous flow of business in all operating units. Demand for insurance and rental space remained buoyant notwithstanding trends in the rationalisation of space by tenants as most business was conducted from home during the lockdowns. 

“There was a slowdown in property sales and increased pressure on occupancies on leased premises. 

“The onset of hyperinflation in Zimbabwe resulted in the need to constantly review sums insured by policyholders and a spike in the cost of insurance claims and operating costs.

“The tight liquidity situation in Zimbabwe slowed down premium and rental collection thereby impacting investment portfolio growth,” said Mr Kumalo.

Total comprehensive income came in at $1,4 billion from  $1,3 billion in 2019.

At $2,8 billion, total income was 11 percent above prior year. 

The increase was mainly driven by the strong top-line growth in premium income in Mozambique and Botswana as the units consolidated their respective market positions, the growth in rental income with the coming on stream of property space with high rental yield and the upward reviews of rentals as well as property revaluation gains following the change of functional currency.

According to the group, regional operations contributed 57 percent in gross premium written (GPW) in 2020 compared to 64 percent in 2019.

“The contribution mix is underpinned by the clawback in the Zimbabwean operations and the continued beneficial hedging effects of the regional operations,”

said Mr Kumalo.

Total claims and expenses declined by 27 percent to $1,4 billion from $1,9 billion in the comparable year driven by an overall decline in operating expenses, acquisition costs and claims.

“In historical cost terms, there was an overall increase in claims and expenses due to exchange rate driven inflationary pressures experienced in the domestic economy.

“Management remains committed to keeping operating costs and technical expenses under control,”

said Mr Kumalo.

During the proud under review, positive cash flows were generated from most operations mainly on strong business growth momentum achieved, leasing of space to quality tenants, implementation of premium warranty policies in certain markets and strengthening of the effects of moderate improvements in credit control functions in most business units. 

Overall, the group generated cash of $4,8 billion from operations which was 336 percent up from the comparative period in 2019.

Total assets rose 154 percent to $12,4 billion.

The group’s financial position remained sound mainly due to the revaluation of investment properties and other non-monetary assets.

During the year under review, Zimre Property Investments Limited ZPI delisted in November after ZHL had achieved a 100 percent shareholding in the company as the group sought to consolidate its operations, strengthen the balance sheet and streamline operational costs in the face of mounting economic challenges. 

Fidelity Life Assurance of Zimbabwe Limited also became a subsidiary of ZHL with effect from December 4, 2020 following the successful acquisition of a 67 percent equity stake in the business.

Leave a Reply

Your email address will not be published. Required fields are marked *