ZimRe after tax profit plunges 57pc
ZimRe Holdings has reported a 57 percent decline in inflation-adjusted profit after tax to $4,1 billion in 2022 compared to the same prior year period.
According to a statement accompanying the financial results, total income however grew by 9 percent to $39,5 billion as Gross Premiums Written increased by 13 percent to $20,4 billion while fair value adjustments gained $17,9 billion.”
The group highlighted the adverse impact of a spike in agriculture insurance claims on its financial performance. This played a part in the sharp profit decline during 2022, but the weak growth in GPW and total core Income also weighed on the group.
In the period under review, total expenditures increased by 36 percent to $30,1 billion, with benefit and claim payouts increasing by 17 percent to $7,3 billion.
“The group’s net cash flows from operations increased by 361 percent to $8,6 billion which supported investment expenditures of $2,3 billion, 23 percent lower than the 2021 comparative,” the company said.
The group’s total assets stood at $122,2 billion, comprising investment properties of $68,2 billion, financial assets of $11,2 billion and cash holdings of $10,9 billion.
ZimRe’s total liabilities stood at $71,3 billion, with life insurance contracts of $24,5 billion, short-term insurance contracts of $7,8 billion and investment contracts of $18,1 billion.
The other concern is the sharp rise in the group’s payables and accruals during the year relative to the low growth in the core income streams. More guidance is required on the expected future behavior of agriculture claims, given that the group cited “the climate change effects” as the driving cause.
Analysis of historical total insurance income shows growth in the group’s core non-life reinsurance business has been fairly subdued in the last three financial years.
The contribution of the acquired broking business remains low, but its an area that has potential for an operation backed by the resources of a relatively large integrated financial services group. The acquired life and pensions business has materially increased the groups business, but declined significantly during the financial year.-ebusinessweekly
