Fidelity Life Assurance reported a 55 percent decline in after tax profit to $2.3 million in the full-year to December 31, weighed down by an increase in claims and subdued premium income.
Net insurance premiums fell 10.7 percent to $14.8 million in the period from $16.6 million recorded in the prior year.
Total revenue declined by 29.9 percent to $36.6 million, from $52.1 million in the previous year.
Chairman Fungai Ruwende said insurance claims increased by 6.6 percent to $7.2 million compared to $6.7 million recorded in the preceding year.
“The insurance sector continued to be affected by high claims, low uptake of products, cancellations, policy surrenders and failure by employers to remit contributions deducted from employees,” Ruwende said in a statement accompanying the results.
Property development expenses decreased significantly from $20 million in the previous year to $4.5 million as the Southview park project nears completion.
The group acquired Langford Estates from CFI Holdings in 2015 in a land for debt swap transaction that increased the finance costs to $2 million relative to $500 000 in the preceding year and also resulted in the assumption of debts amounting to $14 million.
It also sold off the remaining stands at Fidelity Life Southview Park project.
The life assurance reported an eight percent decline in premium income to $12.4 million in the period from $13.5 million previously with total revenue easing 33 percent to $29.9 million.
Additionally, the group’s Malawi unit, Vanguard Life Assurance recorded a 24 percent decline in premium income to $2.5 million.
Ruwende said the microfinance institution unit recorded a significant increase in profit to $1 million from $380 000 previously.
The asset management unit recorded a loss of $190 000 on the back of fair value adjustments on its property portfolio to reflect the current valuations.
Group total assets increased by 6.4 percent to $112.6 million in the period from $105.8 million in the previous year.
Net cash generated from operating activities at $4.5 million was a significant improvement from a negative balance of $23 million recorded in the previous year.
Ruwende said the group will complete the Southview project this year and it will undertake the Langford Estates project which is expected to yield over 12 000 residential stands.- The Source