Changes in the macro-economic policy on interest and exchange rates announced in February have brought hope to the battered economy says Zimnat Lion Insurance in its report for the year ending December.
It says last year’s performance was significantly influenced by high inflation, sub-economic money market interest rates and poor performance from prescribed assets.
But all the same, the company more than doubled its net profit from $302.5 million to $629.7 million. Gross premium increased from $2 billion to $5.8 billion while investment income shot up from $286.1 million $627.5 million.
The company, however, says the cost of claims also shot up because of inflation. The cost escalated largely because of the increase in the cost of motor vehicle spares and farming claims which related mostly to the theft of irrigation equipment.
The company says high inflation also increased values of insured assets which in turn created reinsurance capacity constraints in the market and led to the externalisation of some large corporate accounts.
It says, however, improved risk assessment and management using Renew It Automotive, a 100 percent owned subsidiary, and the firming interest rates are likely to impact positively on its performance.