Fidelity Life Assurance Reports 163% Growth in Inflation-Adjusted Insurance Contract Revenue

Published On: October 3, 2023Company: Fidelity Life Assurance of Zimbabwe Limited (FIDL.zw)
What was the key driver for the growth in Fidelity Life Assurance's insurance contract revenue?
The key drivers for the growth in insurance contract revenue were the significant growth in new policies written and increase in USD denominated business.

Economic Overview

  • The first half of the year witnessed rapid deterioration of local currency leading to increased use of foreign currency.
  • The business experienced an increase in foreign currency revenue and operating expenses.
  • The economy had a boost from improved agriculture output and improved power supply.
  • Tightening liquidity and demand for the Zimbabwe dollar was implemented to stabilize the exchange rate.

IFRS 17 Reporting

  • The Group adopted IFRS 17 Insurance Contracts from January 2023, replacing IFRS 4 Insurance Contracts.
  • This establishes principles for the recognition, measurement, presentation, and disclosure of insurance contracts and investment contracts.

Group Financial Performance Review

  • Inflation-adjusted insurance contract revenue grew by 163%.
  • Insurance contract revenue was driven by significant growth in new policies written and an increase in USD denominated business.
  • The Group recorded a negative insurance service result due to inflationary pressures in Zimbabwe.
  • Profit for the period grew by 123% on an inflation-adjusted basis.

Business Operations Overview

  • Despite international and local turbulence, the board and management achieved set targets for the period.
  • Focus on core life and pensions business, customer experience, and innovative solutions.
  • The company won the most innovative insurance company award during the period.
  • Commitment to creating value in the communities it operates in, and sustainable development goals.
  • Strong emphasis on brand positioning, and diversity to cater for different market needs.

Dividend

  • The board decided not to declare an interim dividend for the period.

Outlook

  • The macroeconomic environment is expected to remain as it is for the second half of the year.
  • The Central Bank is expected to continue maintaining a tight monetary policy to stabilize the exchange rate and prices.

Useful links

About Fidelity Life Assurance of Zimbabwe Limited (FIDL.zw)

Fidelity Life Assurance of Zimbabwe Limited is a holding company providing products and services for life assurance, employee benefits, asset management, medical insurance, funeral assurance provision of actuarial services and residential property development. This includes managing pensions, funeral insurance and microfinancing in the informal banking market. Fidelity Life Assurance Zimbabwe offers additional products for individual loans, salary-based loads and loans for farmers. Its actuarial services include life and general insurance services, healthcare insurance, investments and finance and funeral assurance schemes. Its asset management services include unit trusts, money market funds, equity funds, balanced funds and advisory services. Its medical aid services include an access health package, express health package and a foundation health package. The company operates in Zimbabwe and Malawi, with the latter offering products for life assurance and pensions. Fidelity Life Assurance of Zimbabwe Limited is listed on the Zimbabwe Stock Exchange

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