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WITH over 80 percent of transactions now in U.S. dollars, First Mutual Holdings (FMHL) said it will expand its U.S. dollar-based product portfolio to maintain product relevance.

FMHL is a leading financial services group in Zimbabwe, offering services in risk management, wealth creation, and wealth management. In the group’s financial statements for six months to June 30, 2023, group chairman Mr Amos Manzai said the group also maintained its stance of diversifying its pool of investment assets largely skewed towards real assets to minimize the impact of economic volatility.

“Save for the Victoria Falls Stocks Exchange listed equities, there was a positive real return on the remaining components of the investment portfolio, including ZSE-listed shares, investment property, and alternative investments,” he said.

During the period under review, insurance contract revenue (ICR), at $199,5 billion, grew by 105 percent compared to $106,4 billion during the same period last year.

“The growth in comparison to the same period last year was largely driven by the continued revaluation of Zimbabwe dollar insurance policy values to ensure adequate cover for clients as well as a migration of more policies to the US dollar for value restoration in case of the occurrence of an insured event.

“The proportion of the US dollar business being written by the group constituted 74 percent of the total ICR at US$45,8 million,” he said.

Rental income for the period grew by 117 percent to $7,9 billion compared to $3,7 billion in the same period last year.

Mr Manzai said the growth was driven by a combination of factors, which included a migration to US dollar-denominated leases as well as inflation-driven adjustments to Zimbabwe dollar rentals.

The group’s occupancy levels stood at 88.10 percent compared to 89,99 in the previous comparable period. The average rental per square meter was $4,02 per square meter compared to the prior year’s $3,03 per square meter.

The group’s total assets grew by 125 percent to $1,4 trillion in inflation-adjusted terms.

“Growth in both inflation-adjusted and historical cost terms was mainly driven by positive fair value adjustments on investment properties and the impact of the depreciation of the Zimbabwe dollar on US dollar-denominated current assets, including balances with banks and insurance contract assets,” said Mr Manzai.

Group chief executive Mr Douglas Hoto said at First Mutual Life Assurance, ICR for the period amounted to $15,7 billion-343 percent ahead of last year, driven by the regular revisions in sums assured retain the value of policyholders.

“Growth in premiums from the retail segment was largely due to significant growth in US dollar-denominated premiums on the Eternal Life Plan and E-FML Gold Funeral products,” he said.

Mr Hoto said in the corporate segment, growth in premiums was attributable to growth in the group’s life assurance portfolio arising from new business and organic growth.

“The organic growth stemmed from the effect of employee salary increases as employers sought to attain the target financial security benefits of this product,” he said.

First Mutual Health Company reported revenue of $82,1 billion, an increase of 117 percent compared to prior.

The growth was largely driven by the regular exchange rate linked reviews to premiums in response to increased medical benefit costs to cushion members from the negative impact of shortfalls.

First Mutual Properties (FMP) rental income for the period under review grew by 121 percent to $7,9 billion compared to the prior year, largely due to the migration to US dollar foreign-denominated leases, with those maintained in the local currency being adjusted for inflation-linked reviews.