FIDELITY Life Assurance of Zimbabwe (Fidelity Life) expects revenue in the second half of the year to remain predominantly in foreign currency despite an anticipated growth in local currency transactions in the economy.
In a statement accompanying its half-year financials, Fidelity Life’s chairperson, Livingstone Gwata, said whilst the acceptance of the ZWG increased across the economic sectors, the volume of new business written in foreign currency increased to 89 percent from 73 percent in the same period last year.
“While the use of the local currency in domestic transactions is expected to grow, we expect the business revenue in the second half to remain predominantly in foreign currency,” Gwata said.
The group recorded a 277 percent increase in insurance contract revenue to US$8,2 million during the six months to June 30, 2024, from US$2,2 million in the comparable period, driven by robust US dollar business growth.
“Innovative product sales brought in new business and organic expansion, as customers increasingly embraced the group’s offerings. Vaka Yako’s strengthening market position was a notable highlight, underpinning the group’s insurance revenue growth,” he added.
The group’s insurance service result for the half year improved significantly from a negative US$4,4 million to a positive US$2 million, driven by growth in insurance contract revenue, reduced claims experience and effective expense management.
The aforementioned resulted in lower insurance service expenses, a seven percent decrease from the same period in the prior year, which enhanced the insurance service result position for the period under review.
Fidelity Life achieved a 135 percent profit increase to US$5,2 million during the period under review, up from US$2,2 million recorded in the prior year, driven by a trifecta of growth in insurance contract revenue, low insurance service expenses, and fair value gains from the property portfolio.
Going forward, the group is confident that it will achieve strong revenue and profitability growth despite forecasts of a broader economic slowdown.
According to Gwata, the key driver of this performance will be the Vaka Yako/Yakha Eyakho housing scheme, which has seen a surge in demand following the successful commissioning of Stoneridge Park residential stands in August 2024.
The Vaka Yako product was born out of a deepening social need for home ownership and following the commissioning of some of the stands within this product portfolio, the group demonstrated its dependability.
“More product offerings under the “Yako” brand are in the pipeline to continue to address society’s changing needs,” Gwata said.