Fidelity Life sees opportunities with US sanctions lifted
ZIMBABWE Stock Exchange-listed insurance concern Fidelity Life Assurance Zimbabwe (FLA) has said the US Government’s lifting of the Zimbabwe sanctions programme in place since 2003 will open an opportunity for further engagement with the global community.
In March, the United States made piecemeal adjustments to the sanctions regime imposed on Zimbabwe.
In a statement accompanying the abridged audited consolidated financial results for the year ended 31 December 2023, FLA chairman Mr Livingstone Gwata said the pronouncements by several Western governments indicating some easing of restrictive measures on Zimbabwe and their call for foreign businesses and financial institutions to have a new look at Zimbabwe’s markets are causes for optimism.
“Although the proposed reconfigurations fall short of the desired full, unconditional lifting of restrictive measures, it opens an opportunity for further engagement with the global community,” he said.
Mr Gwata said the company is going to capitalise on the multi-currency regime saying that the majority of transactions in the private sector are currently taking place in the United States dollars.
He also said FLA will take advantage of developments in the country and develop products which will survive the test of time at the same time providing value to its key stakeholder.
“The central Government remains committed to the attainment of the Vision 2030 goals under NDS1 and NDS2 through various projects, which include among others infrastructure projects in road and dam construction and rehabilitation, as well as irrigation projects.
“This is commendable given aggregate demand created in the value chain and beneficiation in the steel and chrome mining sector,” said Mr Gwata.
USD: Image taken from Shutterstock
“Given the above, the business remains on high alert to these activities and will continue to monitor and carefully adapt to these changing circumstances to deliver value to its key stakeholders.’
He added that innovation will be key in also driving the products that create and preserve shareholder and policyholder value.
Meanwhile, Mr Gwata said inflation adjusted insurance contract revenue recorded a strong growth of 242 percent compared to prior year from $34,1 billion to $116,6 billion.
Historically he said cost insurance contract revenue grew by 962 percent compared to prior year from $4,6 billion to $48,5 billion.
“The impressive growth in insurance contract revenue was on the back of the group’s innovative product development bearing fruits and increased uptake of the company’s products offering on the market.
“Significant growth in premium inflows was witnessed through the Vaka Yako product contributing 83 percent of the individual life premiums,” he said.
“The Zimbabwe operation contributed 62 percent (2022:56 percent) of the premium inflows whilst 38 percent (2022: 44 percent) is attributable to the Malawi operation.”
FLA insurance service result increased by 280 percent on an inflation adjusted basis and increased by 1598 percent under historical cost underpinned by real growth in insurance contract revenue.
Mr Gwata said this is despite an increase in insurance service expenses propelled by the increase in claims and directly attributable costs due to the inflationary environment prevailing in Zimbabwe and the regional business operation.
“Net investment income grew by 91 percent compared to prior year from $37,0 billion to $70,8 billion on an inflation adjusted basis. Historical cost net investment income grew by 241percent compared to prior year from $20,8 billion to $71,0 billion.
“The major drivers being fair value gains from investment property, equities and interest income from money market investments,” he said. —chronicle
