First Mutual reports strong performance

First Mutual Holdings Limited has reported a strong insurance service result for the third quarter ended September 30, 2024, boosted by growth across its business units and improved reinsurance recoveries.

The insurance service result climbed by 31 percent, reaching US$16,5 million, driven by increased in-force contract reserves (ICR) within its insurance segments.

This growth was further supported by the group’s strategic migration to U.S. dollar-denominated policies, which has provided a more stable claims framework, although leading to higher claims as benefits are fixed in USD terms.

Sheila Lorimer, First Mutual’s Chief Executive, highlighted the Group’s proactive approach to strengthening its insurance business, noting that: “The move to USD policies is a strategic decision aimed at enhancing benefit stability and safeguarding client investments. However, this shift does bring higher claims variance as benefits are realised in a stronger currency.”

First Mutual’s rental income also saw a notable increase, reaching USS$6,2 million, up 27 percent compared to the same period last year.

This was due to both higher occupancy rates, which rose from 87,82 percent to 90,64 percent, and increased rental income per square meter, from US$4.78 to US$5.95.

Additionally, a significant proportion of rental income, 79 percent was in USD, up from 72 percent in the prior year, reflecting First Mutual’s focus on currency stability.

However, despite these gains, the group’s profit after tax slipped to US$9,4 million from US$10,1 million a year earlier, attributed to a decrease in net investment returns and higher tax expenses.

Lorimer acknowledged this decline but emphasised that “Our primary focus remains on building sustainable income streams, and we anticipate stronger profitability as we continue to align our investment strategies with prevailing market conditions.”

The company’s total assets rose 15 percent year-to-date to US$254,5 million, supported by fair value gains in quoted equities, investment property, and an increase in reinsurance contract assets. Shareholders’ equity also rose by 12 percent, reflecting the overall stability and growth of First Mutual’s financial base.

“First Mutual’s third quarter performance highlights the resilience of our diversified portfolio. As we close out the year, we remain committed to fortifying our balance sheet and enhancing returns for our shareholders,” Lorimer added.-ebsinessweekl