Fidelity pursues new regional markets

FIDELITY Life Assurance says it is exploring investment opportunities in the region and beyond to widen revenue streams.
Fungai Ruwende, the group’s chairperson, said the business continues to carefully select markets in order to attain the right revenue mix.
“Despite the delays we have experienced due to various lockdowns both in Zimbabwe and in the region, the group remains resolute to add to its regional presence as soon as possible,” he said in a statement accompanying the group’s financials for the year ended December 31, 2020.

He said during the period under review the group embarked on various initiatives to ensure continued growth. “These include the setting up of a bureau de change to increase US$ earnings for the group as well as finalising an agreement to become a money transfer agent with a reputable partner.

“In our medical aid business, we have ensured that we continue to offer relevant services by introducing Covid-19 cover, while the life business looks to remain relevant to our customers by reviewing both premiums and policy benefits and offering US$-denominated products,” he noted.

He added that the group restructured its balance sheet at the beginning of the year to fully optimise key assets, improve solvency and performance and over the year, there has been good progress and the impact of this is now being felt.

According to Ruwende, the group posted a positive performance despite the negative impact of Covid-19 during the year under review after recording a profit before tax of $69,2 million. However, revenue was down 47 percent to $1,2 million from $2,2 million recorded in prior year largely as a result of a slump in investment income, which decreased 88 percent.

“Investment income is mainly driven by fair value gains on investment properties which are driven by the movement in exchange rate.”
Ruwende said the subsidiary in Malawi continues to provide diversification relief to the group against the unstable currency movements in Zimbabwe.

Inflation adjusted group total expenses decreased by 41 percent from $1,8 million recorded in prior year to $1,08 million in the current year.
Ruwende said the group recorded major savings on the Southview water pipeline works, which resulted in project development costs decreasing by 82 percent from $488,9 million prior year to $79,7 million current year.

“However, operating expenses decreased by a much lower 31 percent from $366 million to $252 million recorded in the current year,” he said.
The group’s total assets increased by 19 percent in real terms to $5,5 million from $4,6 million as at December 31, 2019.

The asset growth, Ruwende says, was driven by investment property and equity investments, which account for 70 percent of the group’s total assets.
He added that the real growth evidenced management efforts to protect value of investments for key stakeholders, policyholders and shareholders.
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