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Mrs Grace Muradzikwa

NICOZ Diamond says it will this year focus on revenue and cost alignment after witnessing a slow start to the year. Managing director Mrs Grace Muradzikwa told analysts on Friday that the group would now “tighten the belts” by enhancing and sustaining its liquidity position as well as growing its investment portfolio.

The group does not expect significant growth in the current environment after Gross Premium Written in the two months to February amounted to US$6,95 million, a marginal decrease from US$6,96 million last year.

“As anticipated revenue growth is subdued reflective of the economy but this is totally in line with expectations,” said Mrs Muradzikwa adding that the group would focus on managing costs and maintaining a healthy bottom line.

In the year to December, economic growth had significantly slowed as the liquidity situation tightened.

“This had affected the way we do business,” said Muradzikwa

As a result revenue growth slowed while premium collections remained a big challenge. Mrs Muradzikwa said the market remained highly competitive with 24 active players.

She said the group would aggressively grow alternative distribution channels as these were gaining prominence.

“We want to offer convenience to clients.”

Mrs Muradzikwa noted the insurance market had grown an average 8 percent with motor remaining the dominant class with a contribution of 45 percent.

The penetration ratio in the country was at 2,1 percent against 10 percent in South Africa while Zambia was at 1,6 percent and Uganda at 1 percent.

The group reported GPW of US$30, 018 million in the December year, a 21 percent growth from 2012. Net Premium Written was 29 percent higher at $18,31 million.

Corporate Services head Gloria Zvaravanhu said there had been a significant growth in the underwriting profit of 727 percent to US$892 000.

Pre-tax was up 56 percent to US$3,21 million after accounting for investment income. The group generated cash of US$1,41 million from operating activities.

Investment income of US$2,32 million was largely made up of property at 61 percent but Zvaravanhu noted that the group had dropped its exposure in property from 76 percent.

The bottom line was lower after associates traded in the negative while earnings amounted to 0,4c. The group declared a dividend of 0,064c per share.

In terms of the ratios, Zvaravanhu said the expenses/EP was at 37 percent and was now nearing the 35 percent target.
Claims/EP was at 47 percent, ROCE was at 17 percent and the solvency margin was at 59 percent.

Head of Operations Noel Manika, said motor remained the dominant class contributing 47 percent to GPW with a retention ratio of 75 percent.

The contribution to claims was at 73 percent while the loss ratio was 59 percent. For the group, total claims amounted to US$7,42 million.

There were a total 3 817 claims with an average cost per claim of US$1 945. — FinX.