By Alois Vinga
LISTED insurance firm, Fidelity Life Assurance (FLA) has commended the positive economic leap which saw Zimbabwe breaching a ten-year-long record after earning foreign currency inflows hit US$11,6 billion in 2022 posting a 17,3% increase compared to the previous year.
Presenting the concern’s performance for the period ended December 31 2022, FLA chairman, Livingstone Gwata said the increased inflows are an upside development in the economy.
“On the upside, Zimbabwe recorded its highest foreign currency receipts in 10 years. Foreign currency receipts for the year amounted to US$ 11,6 billion which represents an increase of 17,3% in comparison to the US$ 9,9 billion received in 2021.
“The use of the United States Dollar (USD) gained more prominence in 2022 as evidenced by the increased Foreign Currency Account (FCA) deposits, foreign currency denominated loans and proportion of foreign currency revenue to local businesses,” he said.
He observed that despite the ZW$ depreciating in the second quarter of 2022 on the back of incessant inflationary pressures, the trend transformed for the better in the later part of 2022 due to diverse policy measures introduced by authorities which included interventions aimed at stabilising the exchange rate and taming the resurgent inflation through the introduction of the Mosi oa Tunya Gold Coins, value for money policy, and hiking of interest rates.
“During the period, FLA total income grew by 45% in inflation-adjusted terms to ZW$%16 514.9 million from ZW$11 359,2 million recorded in the prior year and under historical cost, a growth of 523% was recorded from ZW$4 979.2 million to ZW$ 31 016,6 million recorded in the current year.
“The strong income growth was underpinned by core business net premium written and investment income which increased by 230% and 475% respectively,” said Gwata.
Growth in net premium written from ZW$982.1 million recorded in the prior year to ZW$3 245.1 million was above the inflation rate which stood at 244 % as of 31 December 2022.
The growth is premised on regular reviews of recurring premiums, product modifications, new market segments and leaning towards generating US$ revenue to keep up with the volatile economic environment.
The gains on investment property show the reflective nature of this asset class in response to the macroeconomic sphere.
“As the Zimbabwean economy continues to progress on a stable path with continued Government intervention and regulatory policies that stimulate growth, the Group is optimistic about the future. The FLA team remains focused on executing the business model of resilience and growth centred on providing adaptive insurance, health and financial services solutions driven by customer’s needs in the obtaining operating environment,” added Gwata.