Zimre Holdings Limited reported gross premium written jumped 17 percent to $32 million during the year to December 31, 2018, despite a challenging economic environment.
Business during the period under review remained constrained on the back of economic volatility that was a result of foreign currency shortages pricing distortions, rising inflation and low industry capacity utilisation.
“Despite the difficult operating environment prevailing in Zimbabwe, the Group’s various operations continued to demonstrate resilience and recorded overall profitable performance with the local reinsurance operations continuing to record positive performance,” said ZHL in a statement accompanying group financial results.
Profit for the year came in 39 percent lower to $3,55 million as a result of the reduction in the contribution from property and subdued investment income performance.
Non-recurring income and expense items declined from a net income of $3,31 million in 2017 to $1,46 million.
At $55,39 million, shareholders’ equity increased by 11,5 percent compared to prior year levels due to the positive profit outturn and the acquisition of additional equity stakes in Emeritus Resegguros, SA and ZPI.
Domestic reinsurance operations trading as Emeritus Reinsurance, achieved a 29 percent growth in premium income to $16,7 million from $12,93 million in the prior year.
Credit Insurance Zimbabwe Limited (Credsure) recorded a 36 percent growth in gross premium written to $3,23 million from $2,37 million achieved in 2017 on the back of a strong off-take in the performance of the Underwriting Management Agencies (UMAs) that were accredited to the business.
According to ZHL, recovery in the domestic insurance and reinsurance operations could have been more robust if the macroeconomic environment had been more conducive.
On regional operations, the absence optimal capital to support aggressive business acquisition had a knock on effect on business.
Total income came in 8 percent lower to $33,55 million as a result of low capital bases in the regional operations and limited business retention levels mainly in Zambian and Mozambican reinsurance subsidiaries which were not able to absorb the existing market insurance capacity.
An additional capital amounting to US$1,5 million was injected into the subsidiaries in order to enhance capacity.
The underperformance of the money and capital markets in Zimbabwe also had a negative impact on investment income.
At Zimre Property Investments (ZPI) stand disposals were also suspended as a value preserving strategy pending improvement in economic fundamentals in Zimbabwe.
Meanwhile, CFI remains suspended from the local bourse on breach of governance requirements that have not yet been addressed although work is in progress to resolve the sticky issues.
The group has indicated its focus for the current year would be on value preservation in Zimbabwe and build foreign currency reserves more focus will also be on regional operations as a new growth frontier and uplift their performance.
ZHL did not declare a dividend in order to preserve capital.