Published: 17 April 2014

Old Mutual Zimbabwe reported improved profitability for FY2013 as the insurer's adjusted operating profit for the year ended December 31 2013 went up by 7 percent to $64 million while its IFRS profit grew by 713 percent to $122 million.

The figures were announced yesterday afternoon by group financial director Isaiah Mashinya during the company's analyst briefing. Old Mutual's premium income was 16 percent up at $159 million while net client cash flow grew by 9 percent to $97 million.

In terms of segment contributions to AOP, insurance contributed 56 percent against 48 percent in the prior period, banking 29 percent versus 40 percent, investment services 11 percent from 7 percent and holdings and other contributed 4 percent from 5 percent. The group's total revenue improved by 59 percent to $454,6 million with net earned premiums going up 17 percent to $148,8 million, investment income rising by 155 percent to $235,2 million and banking interest and similar income 10 percent up to $32,7 million on prior year.

Management attributed the "huge growth" to the investment returns ($235,2 million) which were realised most of which was driven by the Zimbabwe Stock Exchange performance during the period under review. Fee income, commissions and income from services contracts improved by 6 percent to $37,4 million.

During FY203 the group posted a 1 892 percent growth in profit for the year at $105,6 million, while its total assets increased by 19 percent to $1,821.3 million.

In terms of segment performance, Mashinya said OMLAC's IFRS profit improved by 68 percent to $42 million while the gross earned premium went up 3 percent to $133 million.

CABS' net interest income improved by 10 percent to $33 million while loans and advances grew by 16 percent to $322 million. Deposits increased by 30 percent to $462 million.

"CABS was keeping exceptionally high levels of liquidity last year," said Mashinya.

There was credit line growth of 22 percent to $24 million in CABS while loan book increased by 14 percent to $322 million. Meanwhile, NPLs were 10.3 percent against industry average of 15.9 percent.

RMI posted a 22 percent growth in gross written premium to $28 million and underwriting result went up 50 percent to $3 million. Underwriting ratio closed at 18 percent from the prior 16 percent while claims ratio grew by 5 percent to 45 percent.

On investment services, management pointed to growth of property portfolio as the group completed the construction of the Borrowdale Office Park.

For the outlook, management says it plans to leverage on strong capital base and risk management systems to expand the business.

- BH24

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