First Mutual Holdings records $5m loss US dollars

us dollarsConrad Mwanawashe Business Reporter
FIRST Mutual Holdings recorded a $5 million comprehensive loss attributable to equity holders in the half year to June as the group lost almost $2 million sunk in failed banks.The group said total expenditure in the six months rose to $58,1 million, a 20 percent increase from the $48,2 million incurred in the six months to June last year.

A major contributor to the increase was the 46 percent increase in claims to $33,6 million from $22,9 million in 2013. It said the increase in claims was mainly driven by higher claims ratios in the health business and increased retrenchment withdrawals in the life company.

The group incurred rationalisation costs of $2,3 million in the period under review.

“The group incurred a cost of $1,8 million following the impairment of certain money market investments with banks that are no longer operational,” it said.

First Mutual said comprehensive loss attributable to equity holders of the parent company for the half year ended June 30 reached $4,6 million.

The group recorded a $41,1 million loss after tax for the half year to June compared to a profit of $2,4 million as the group’s property division performance slowed down.

Rental income declined as occupancy levels shrank driven by voluntary space surrenders and evictions.

Pearl Properties recorded a two percent decrease in rental income to $3,8 million in the period to June from $3,9 million in the comparative period as occupancy rate declined to 77,56 percent from 79,6 percent achieved in the comparative period.

FMRE Property & Casualty (Zimbabwe) recorded a nine percent decrease in gross premium written to $11,5 million.

Gross premium written at the group’s life business, First Mutual Life Assurance grew by 22 percent from prior year to $16,4 million compared to $13,4 million recorded same period in the prior year.

Employee benefits premium income at $9,1 million, 26 percent higher than the $7,2 million same period last year. The group attributed that growth to $2 million in single premiums received from asset transfers and preservation fund. Individual premium for the period grew by 18 percent to $7,3 percent -$6,2 million to June 2013- due to an increase in uptake of individual life and funeral products.

Gross premium written at FMRE –Life and Health was nine percent higher than prior year which was at $10 million. The increase was mainly driven by growth in the individual business class.

At Tristar Insurance Company, cumulative gross premium written for the first half slowed down one percent below prior year to $4,4 million from $4,5 million.

This was mainly due to loss of some key accounts which were partially offset by increased business from the leading insurance brokers.
Gross premium written at the group’s Botswana associate company, FMRE Property & Casualty (Botswana) grew by 29 percent to $1,8 million for the six months under review from $1,4 million in the comparative period.

The company attributed the growth to new business written during the second quarter from the Botswana market following the recapitalisation of the subsidiary in 2012.

First Mutual Holdings incurred an overall investment loss of $1,7 million compared to an investment profit of $7,5 million in the prior comparative period.

The group said it remains optimistic about Zimbabwe’s medium and long term economic prospects despite the current economic uncertainties which pose challenges to the operating environment.

 

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