Financial services group First Mutual Holdings Limited (FMHL) said yesterday a decline in insurance claims and administration expenses aided it to record a massive 496 percent increase in net profit to $$2,6 million for the half year ended June, 2016. During the same period last year, FMHL posted an after tax profit of $442 000.Group chairman Oliver Mtasa said the gross premium written (GPW) was almost flat at $60,6 million from $60,2 million.
“Operating profit, before the outturn on the investment portfolio, improved to $4,9 million compared to prior period profit of $1,9 million, largely due the lower claims in the insurance business for the shareholder, a $900 000 reduction in administration expenses and an $800 000 reduction in provision for credit losses,” he said.
The group opted not to declare a dividend citing the need to consolidate operations of its seven subsidiary companies.
In terms of individual company performance, First Mutual Health saw its GWP marginally increasing by one percent to $$26 million while its claims ratio was down to 78 percent from $85 percent.
First Mutual Life Assurance saw its GPW shoot 18 percent to $18,4 million while claims and benefits were up 36 percent due to a surge in retrenchment claims.
FMRE Life and Health, FMRE Property and Casualty Zimbabwe as well as Pearl Properties all recorded a slump in the GPW for various reasons.
FMRE Property and Casualty Botswana saw its earnings jump 31 percent to $2,6 million.
“Claims were contained within expectations leading to a significantly improved operating profit for the period,” said group chief executive officer, Douglas Hoto.
Mr Hoto said “little change” was expected in the second half of the year, adding “greater resilience from the group as well as increased focus on customer service excellence, system efficiencies, cost containment and a prudent investment policy” would be critical in maintaining profitability. – New Ziana.