Financial Commentary
Inflation adjusted revenue analysis
Net Premium earned (“NPE”) at $4.67 billion was 65% above prior year in inflation adjusted terms due to new business as well as above inflation rate revisions of sums insured in order to achieve adequate cover, particularly for the short-term insurance policies.
Total income was 31% higher than the prior year reflecting the revenue growth and fair value gains in equity investments driven by the bull run that has been experienced on the Zimbabwe Stock Exchange in the recent months. However, there were fair value losses on investment properties as rental income, a key aspect in the valuation of leased property, requires longer periods to adjust for the impact of inflation.
The profit for the period grew by 233% to $699 million mainly due to growth experienced in net premium earned and relative growth in investment income as explained above.
Historical financial performance analysis
NPE at $4.37 billion was 168% higher than prior year and average year-on-year inflation rate of 67% for the quarter. The increase was primarily due to acquisition of more business, an upward review of sums insured.
Rental income at 199 million was 123% higher than prior year largely due to quarterly rental reviews made during 2021 coupled with improvements in the occupancy rates from 88.22% in 2021 to 90.37%.
The total assets increased by 20% compared to 31 December 2021, mainly attributable to fair value gains on equity investments driven by the bull run experienced in the ZSE as well as a revaluation of foreign currency denominated assets. The growth was in line with the consumer price index (“CPI”) movement of 20% from December 2021 to March 2022.
The liabilities include investment contract liabilities amounting to ZWL14.9 billion. These increased by 17% compared to 31 December 2021 mainly attributable to fair value gains on equity investments and the revaluation of foreign currency denominated assets.
