Fidelity Life Assurance says ability to de-risk from Zimbabwe by actively seeking opportunities in the region and beyond will play a major role in its prospects for the coming year.
The Malawi subsidiary, by its foreign nature, generates foreign currency revenue which is a hedge against high Zimbabwe inflation, according to the group.
“The business continues to carefully select markets in order to earn the right colour of revenue. Work is still ongoing to de-risk from the Zimbabwe market by exploring investment opportunities in the region and beyond,” group chairman Fungai Ruwende said in a statement accompanying the results.
“Despite the delays we have experienced due to various lockdowns both in Zimbabwe and in the region the group remains resolute to add to its regional presence as soon as possible.”
Importantly, Ruwende said, the company’s strong balance sheet and diversified income streams provide offsetting stability and growth.
In 2020, the group embarked on various initiatives to ensure continued growth. These include the setting up of a Bureau de Change to increase USD earnings for the group as well as finalising an agreement to become a money transfer agent with a reputable partner.
As for the medical aid business it ensured that it continued to offer relevant services by introducing Covid-19 cover, while the life business looks to remain relevant to our customers by reviewing both premiums and policy benefits and offering USD denominated products.
It began a balance sheet restructuring program at the beginning of the year to fully optimise key assets, improve solvency and performance.
Inflation adjusted revenue declined by 47% from ZWL$2,180.7 million recorded in 2019 to ZWL$1,150.0 million recorded in 2020. This was attributed to a slump in investment income which declined by 88%. Investment income is mainly driven by fair value gains on investment properties which are driven by the movement in exchange rate. “The subsidiary in Malawi continues to provide diversification relief to the group against the unstable currency movements in Zimbabwe.”
Statutory Instrument 95 (SI 95) requires Insurance companies to hold minimum regulatory capital of ZWL$75 million. The company has excess assets of ZWL$115.4 million as at 31 December 2020 representing a solvency ratio of 154%.
It did not declare a dividend – Harare