Mishma Chakanyuka, Staff Writer 
DIVERSIFIED insurance firm, First Mutual Holdings Limited (FMHL) witnessed increased preference of USD-denominated products from clients in the half year ended 30 June 2024, as they sought to retain value of insurance benefit amid signs of local currency volatility.
The period was characterized by the rapid devaluation of the Zimbabwe dollar during the first three months to March which were followed by the introduction of the Zimbabwe Gold currency in early April.
Douglas Hoto, FMHL chief executive and Douglas Hoto, a local statistician
In a statement accompanying the financials, FMHL chief executive, Douglas Hoto said 83 percent of the group’s Insurance contract revenue was in USD for the period under review.
“The first half of 2024 was characterised by the continued increase in the use of the USD for transacting purposes,” Hoto said.
Under the insurance cluster, NicozDiamond Insurance unit’s insurance contract revenue (ICR) grew by 25 percent to US$$19,8 million from the prior year due to increased foreign currency-denominated business, organic growth, and the upward review of statutory covers.
The business recorded a profit after tax of US$$0,7 million, 65 percent higher than the same period last year buoyed by a notable ICR increase which compared favourably to the lower growth on the main expense items.
The group’s Diamond Seguros business recorded an ICR of US$2,3 million which was 17 percent above the prior year’s amount with growth driven by the company’s continued improvements in broker business following the company’s recapitalisation by the group in 2021.
Under the reinsurance cluster, First Mutual Reinsurance in Zimbabwe witnessed a decline in ICR to US$$6,6 million from US$8 million following a deliberate decision to limit exposure to certain classes as part of risk mitigation.
“The business incurred a loss for the period of US$$0,9 million, 51 percent behind the prior year, due to negative investment returns on its local currency assets,” Hoto said.
Hoto said the First Mutual Health Company ICR for the six months was US$27,9 million, 25 percent above the previous year’s figure of US$$22,4 million.
“The revenue growth was largely driven by the higher contribution of the more stable USD and increased membership,” Hoto added.
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