NicozDiamond reports impressive numbers

Published: 28 August 2013

The short term insurer reported a set of impressive numbers underlined by a 14% growth in gross premium written to $16m. Rental and investment income declined slightly from $0.6m to $0.4m. However, claims also grew at 16% during the period slightly ahead of growth in gross premium written.

Administrative expenses were maintained at almost the same level as last year at $3.2m. This resulted in the group reporting a 45% growth in operating profit to $1.2m. Profits from insurance underwriting amounted to $0.7m with the Zimbabwe insurance entity contributing 100% of the underwriting profit. The group did not declare a dividend in order to preserve cash on the balance sheet.

Cash flow from operations declined by 12% indicating that Nicoz Diamond might be having slow paying customers on its book. The expectation is always that a growth in revenue should also translate into an increase in operating cash flow. This is given credence by the bulging insurance receivables which increased from $6.3m to $8.2m representing more than half of the gross written premium. The group realised $0.5m from investing activities compared to a net investment of $1.6m in the prior period.

Total assets grew by 14% on the back of growth in accounts receivables and cash and cash equivalent on the balance sheet. Current liabilities grew by 26% from $9.8m to $12.4m.

The short term insurance sector is the most competitive subsectors in the insurance industry and Nicoz Diamond is one of the leading short term insurers in this space. The growth in gross premiums written owes much to the closure of some companies in the short term insurance sector after a call for increased capital in the sector last year. The coming in of these new capital requirements saw a number of insurers closing and Nicoz Diamond took advantage of these developments to grow premiums.
- businessdaily