ZIMRE Holdings says the group’s reconfiguration of the business will see the company spearheading significant impact investments in the economy.
ZHL has of late expanded focus from being insurance-centric to wealth creation through investment banking pursuits in strategic national developments.
The new model resulted in the restructuring and remodelling of the group’s business portfolios in line with its new culture, which places “emphasis on sustained value creation through cash generation, customer focus, and change management”.
Benjamin Kumalo, the group’s chairman, in a statement of financials for the half year to June 30, 2021, said while ZHL DNA has been premised on insurance and property, 2021 has seen the group repositioning itself to include wealth creation and management both for its shareholders and the communities within which it operates.
“The group is in the process of significant restructuring that include integration and reorganisation of Fidelity Life Assurance to ensure that the business is focused on core business, business acquisition and innovation,” he said.
ZHL acquired a controlling stake in Fidelity, a company, which it unbundled in 2003, through a share purchase agreement with the National Social Security Authority (NSSA) for its 35,09 percent stake in Fidelity.
The diversified insurer by then had a stake of 20,57 percent in the life insurer and the acquisition saw ZHL becoming the majority shareholder in the company with a 55,66 percent stake.
Fidelity operates three insurance businesses, Fidelity Life Assurance, Vanguard Life Assurance and Fidelity Funeral Services and has several other subsidiaries involved in the provision of micro-lending, medical aid, asset management and actuarial services. The company is involved in property development.
Kumalo indicated that the group is also re-organising its regional reinsurance operations that will positively impact their competitive capital.
The group has reinsurance operations consolidated under Emeritus International in the region in countries such as Botswana, Mozambique, Zambia and Malawi.
ZHL according to Kumalo is in the process of reconfiguration of business units to anchor and propel wealth management activities, which will have significant impact investments in the economy.
The group’s unit, Zimre Capital, has since been given a mandate by the Government to conduct a feasibility study and raise capital for the Beitbridge-Bulawayo-Victoria Fall Highway project.
Meanwhile, for the interim period under review, group premiums grew 102 percent to $2,4 billion from $1,2 billion in the same period prior year largely driven by increased insurance income.
According to the company’s financials, total insurance income grew by 111 percent to $1,7 billion compared to the prior year whilst total income decreased by 32 percent to $2,1 billion due to a 123 percent drop in fair value adjustments on investment properties.
Kumalo said expenses grew to $2,3 billion from $933 million largely attributed to inflationary pressures on operating and administration expenses and once-off restructuring costs following the successful delisting of Zimre Property Investments (ZPI).
As a result, loss before income tax for the period was $524,9 million compared to a profit of 2,59 billion in 2020.
“The loss before tax is attributed to the impact of the actuarially determined gross change in insurance and investment contract liabilities and the impact of the net loss on monetary position,” he said.
He, however, noted that the group posted a profit for the period of $465 million in historical terms.
Kumalo said the group’s assets decreased by 0,7 percent to $14,94 billion during the period under review while total equity decreased to $6,6 billion from $6,94 billion as at 31 December 2020 as a result of the loss incurred in the half year to June 30, 2021. Cash and cash equivalents for the period increased by 21 percent to $1,7 billion during the period under review in line with the group strategy to generate cash for operational use and investment.