Paul Nyakazeya, Group Digital Editor 
FIDELITY Life Assurance of Zimbabwe (Fidelity) says it will focus on preserving value for its policyholders and stakeholders as it diversifies its portfolio investments.
Commenting on the company’s outlook after announcing the group’s financial results for the year to December 31, 2021, chairman Livingstone Gwata said the group will spread its products, aligning them to policyholders’ expectation of preserving value in an environment characterised by high inflation.
“The resurgence of high inflation is, in our view, the biggest threat to the economy in 2022 and the challenge on management is to ensure that revenue grows faster than costs. That growth is set to be achieved through a combination of new financial solutions and new markets.
“High inflation places on us the responsibility to ensure that we preserve value for our policyholders and all stakeholders. To that end, investment portfolio diversification is a priority in the current financial year,” Gwata said.
The group posted an inflation adjusted profit of $74,9 million from a loss position of $65,5 million during the year under review.
Total revenue increased by 90 percent from $1,7 billion recorded in the prior year to $3,3 billion recorded in the current year.
“Revenue was driven by investment income and net premium written which increased by 99 percent and 75 percent respectively. Investment income increased from $866 million to $1,7 billion and net premium written increased from $611,8 million to $1 billion,” Gwata said.
He further said the growth in net premium written was driven by aggressive premium reviews and strong organic growth of the life book as well as significant inflows from new products launched, supported by market diversification and enhancement of the distribution channels.
“Investment income was mainly driven by fair value gains on investment properties and equities. The subsidiary in Malawi continues to provide a good hedge to the group against the unstable currency movements and the adverse impact of the rate of inflation in Zimbabwe,” he said.
The group’s total expenses increased by 66 percent from $1,7 billion recorded in the prior year to $2,9 billion in the current year. The increase in the group’s total expenses was driven by net benefits and claims, changes in insurance contract liabilities and operating expenses which grew by 172 percent, 97 percent and 75 percent respectively.
“Operating expenses were mainly driven by the increase in the rate of inflation and the exchange rate movements whilst net benefits and claims were driven by high Covid-19 related claims resulting from retrenchments and death claims,” Gwata said.
He also said during the year under review, the knock-on effects of repeated national lockdowns on the economy cascaded down to adversely affect corporates and individuals at all levels, adding that Fidelity’s business inevitably experienced reduced economic activity at all levels that impacted the performance of all business units.
“The management and staff have commendably pulled together as a team and managed to maintain our business performance at a satisfactory level. It was pleasing to note that the core revenue lines registered strong growth over the year, and this leaves us in a good position to regain ground going forward. On strategy execution, we had several successes on key milestones in the year under review.”
“We launched a fully-fledged contact centre, we witnessed the creation and launch of an online micro lending on-boarding platform, our life and pensions business launched new products such as Vaka Yako and Covid-19 cover under the Employee Benefits business. On the customer service front, we opened a new service centre in Beitbridge for our funeral services business and FLIMAS managed to get their members vaccinated against Covid-19,” Gwata said.
“The year also saw the group reaching yet another major milestone as we saw the final completion of the Southview offsite works.”
newsdesk@fingaz.co.zw
