NicozDiamond ups profits to US$1 million

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LISTED short term insurer NicozDiamond has reported profits after tax of US$1 million for the interim period ending to June up from the S$654,119 achieved over the same period last year.
Profits from insurance underwriting amounted to US$678,182, nearly all of it coming from the group’s Zimbabwe operations. Net premium also rose to US$10,7 million, from about US$8 million last year.
Management said the group faced problems in cash generation due to collection challenges and intends to tighten instalment plans.
“In cash generation we confessed we did not do well because of the collection challenges that we were having,” said managing director Grace Muradzikwa.
“We can’t say that there is going to be an improvement for the remainder of the year but we intend to continue making it a focus area, so we are very aggressive on our cash collections.
“We continue to engage our clients … at least this time around we do not wish to extend instalments further than six months, we are tightening on the instalment plans,” she said.
Underwriting profits, according to group chairperson Albert Nduna, grew by 127 percent from June 2012 and gave rise to the high growth rates in profitability for the period.
Nduna said while net premium written improved, low disposable income had resulted in reduced demand for insurance.
Turning to regional operations, Nduna said the company maintained its 11 percent investment in Diamond General Insurance of Zambia.
“Fico remains in need of new capital to boost its underwriting capacity and improve its competitiveness in the market. Concerted efforts are being made to ensure that the capital-raising project is concluded before the end of 2013,” Nduna said.
“The company is still on a high growth trajectory and good underwriting profits are being recorded. The company still has a management and technical services contract with United General Insurance of Malawi and the entity remains profitable.
“The start-up insurance company is expected to commence operations beginning in 2014. In Uganda, economic growth is estimated to have been on target at half year and is expected to continue growing, backed by growth in construction, transport, communication and real estate activities.”
Finance executive, Gloria Zvaravanhu, said gross premium written (GPW) went up 14 percent to US$15,99 million against prior period’s US$14,05 million.Advertisement

“We think that we managed to achieve a good performance,” she said.
“Last year our retentions were quite low at about 57 percent. This year we’re looking at about 67 percent so we’ve managed to reduce what we’re paying out to reinsurers resulting in net premium actually growing 34 percent.
“Our claims were also quite good and subdued at US$3,5 million and that’s about 14 percent down from prior period.”
Commenting on rentals, Zvaravanhu said: “Our building occupancy had sort of reduced as we were doing the renovations. We’ve managed to recover all of that.”
Total assets for the group went up 14 percent to US$28.54 million.