eBusiness Weekly
Fradreck Gorwe
The history of Zimbabwe Stock Exchange-listed holding company in the business of life assurance, financial and other services — Fidelity Life Assurance — can be traced back to the pre-independence era when it was incorporated as Legal and General (Private) Limited Rhodesia.
Business portfolio entail Life assurance, Funeral services, Medical aid, Financial services, Asset management, Property (Fidelity South View Park being the flagship property development project) and Actuarial services.
The schemes on offer are either personal or business.
Prior to the incorporation, Legal and General (then incorporated in the United Kingdom), had opened a branch in Bulawayo.
A local consortium bought the company’s insurance division in 1988 and altered the name to Fidelity Life Assurance of Zimbabwe.
In 1996 the Zimbabwe Actuarial Consultancy was formed.
Another subsidiary, Fidelity Life Asset Management (FLAM) was formed in 1998 to ensure third party fund mobilisation for investment management.
The group signed a contract to manage Kenya National Assurance Company in 2002 in a gesture that showed business growth. In the following year, 2003, Fidelity Life Assurance Zimbabwe acquired 10 percent stake in Genesis Financial Holdings. During the same year the group successfully listed on the Zimbabwe Stock Exchange (ZSE).
With a view to establish a micro-finance company to facilitate consumer financing business, the group formed KU Financial Services Limited in 2004.
Another financial services subsidiary, Fidelity Life Premium Finance Company, was formed in 2005 to provide for short-term insurance premium financing. In the same year, the group acquired Fidelity Life Medical Services Company (Flimesco), to spearhead the health insurance business.
In 2006 the company’s individual life division was rationalised in a development that saw many branches closed. This emanated from the need to maintain economically viable divisions given the then hostile operating environment.
A meeting at the close of 2016 resolved to consolidate the business by merging the Premium Finance Division, KU Finance and Fidelity Life Medical Services Company (Flimesco) into Fidelity Financial Services effective January 1, 2007. The aim was to take advantages of existing synergies between the units as well as to avoid duplication of costs. Major developments ensued in 2007.
Fidelity Funeral Assurance was established in 2007 and it commenced trading in July of the year. Hearses were acquired by December 2007 and for the first six months of operation the subsidiary posted a profit.
The Fidelity Life Park also came into being in 2007 when the group purchased 67 hectares of land in Chishawasha. In the third quarter of 2008 work began to develop the land into residential plots.
In 2009 the group undertook a major fundraise through a private placement that was oversubscribed. During the year the company was the best performing counter with a performance of 500 percent.
In June 2009, Fidelity Life Assurance Zambia (Cavmont Life and Asset Management Company) had its trading licence suspended, leading to a temporary halt of operations in the subsidiary. It was subsequently placed under liquidation in September 2010 after not trading for the preceding 18 months.
Another capital raise through private placement for MK 350 million was pursued in Malawi in 2011 to fund the solvency gap in Vanguard Life Assurance (VLA), the company’s Malawian subsidiary. Fidelity got interests in VLA in2003 after it acquired stake in Zimre Holdings.
The servicing of Fidelity Life Park in Manresa was completed in 2012 with plans to commence development of Fidelity South View Park along Masvingo Road in 2013.
In 2014 the group issued a bond to finance development of Fidelity Life South View Park and it was 1.5 times oversubscribed. The project was duly commissioned the same year.
The group acquired 81 percent of Langford Estates (1962) (Private) Limited in 2015. Acquisition of the land bank reportedly resulted in the group assuming debts of $14 million in a land for debt swap transaction. Consequentially, major focus into 2017 and beyond was on debt reduction initiatives to allow optimum debt levels on the company’s balance sheet. Presently the group awaits resolution of reportedly outstanding legal claims against the Langford Estates.
With a view to reposition the Fidelity Life brand in the market, the group in 2019 signed an agreement with the Premier Soccer League of Zimbabwe, making it the official life and health partner offering life cover, funeral cover, and medical support to all players in the league.
One of the rare developments in 2019 was the launch of the Funeral Cash Back Product to offer customers cash back after five free claim years following the latter’s outcry for some benefit from the policies before death.
Broad priorities going forward are built around value preservation, obsession with quality client service, enhancing governance infrastructure as well as exploitation of fresh opportunities in the local and regional markets.
As updated on February 18, 2020, the group holds a market capitalisation of $12 439 040 and a share price of 11,42 cents.
Rueben Java is the current group chief executive officer having been appointed in 2017.
