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premium income constituted over 38 percent of total premium income for the full year to December 2010.
The anticipated multimillion dollar rights offer by parent firm Afre is expected to significantly enhance its underwriting capacity as it aims for exciting profitability.
Despite the recent problems that the parent company Afre experienced, FML seems to have weathered the storm as evidence by its performance.

FML’s income statement for the quarter to March 2011 showed premium income totalled US$13,8 million against US$35,9 million for the full year to December.
Managing director Ms Ruth Ncube would not give details behind the phenomenal growth in income, but admitted the group was on course for good results.

Ms Ncube said: “I cannot give much detail since we are in a closed period.” But she indicated that the life assurance firm was doing “extremely well”.
Strong growth in premium income in the three months to March saw operating profit, before investment income and actuarial transfers, at US$2,45 million, almost quadrupling the 2010 full year profits of US$620 000.

The country’s second largest life assurance firm – after Old Mutual – took along the strong growth in assets, which increased by 30 percent to US$50 million.
FML’s operating cashflow improved significantly at US$4,5 million in March 2011 against US$2,5 million for the 12 months to December 31 2010.

Cash generated from operations stood at a commendable US$3,2 million compared with the 2010 full-year positive cash position of US$6,8 million in December.
The improved profitability and growth in income at FML signifies a fast recovery in insurance business set back by a decade of economic instability.

As the economy recovers steadily, more people can afford to take prudential measures such as life insurance in case of unforeseen misfortune.
FML is 100 percent owned by Afre Corporation, one of the largest financial services group in the country, and is listed on the Zimbabwe Stock Exchange.

The firm was born in 1990, as a member-owned life assurance society through the merger between Prudential, Norwich Union and Colonial Mutual.
In 2003, First Mutual Life Society demutualised, transformed from a member-based society and listed on the ZSE. This resulted in the creation of First Mutual Limited, a financial services firm with a number of subsidiaries.

It is part of the Afre empire that comprises Tristar Insurance, FMRE Reinsurance, Pearl Properties, African Actuarial Consultancy and FMRE Life.
Afre chairman Mr Tawanda Nyambirai said management were last Friday asked to engage in further consultations on the financial requirements of its subsidiaries.

Initially, the firm had proposed a US$10 million rights offer. But the fact the group is staring into US$6,4 million related part exposure means it may need to revise the figure to be able to recapitalise all operations.
While a higher figure might be out of reach for a number of shareholders it certainly would be a drop in the ocean for Econet Wireless, the underwriter.

Provisions will have to be made to cover the hole spawned by suspected irregular inter-party exposure rooted in loans received from Renaissance Merchant Bank, which is a 33 percent shareholder in the diversified financial group.