OLD Mutual Insurance Company Private Limited has posted an 81,34% increase in profit after tax to US$3,54 million in its financial year ended December 31, 2023, buoyed by new insurance products.
In the prior year, profit after tax was US$1,95 million.
Old Mutual Insurance is one of the subsidiaries of financial services group, Old Mutual Zimbabwe.
In a statement accompanying its financial results for the year-ended December 31, 2023, Old Mutual Insurance chairperson Bongai Zamchiya said: “Insurance revenue increased by 65% compared to the previous year driven by aggressive new business growth and strong customer retention.”
He said expenses grew at a lower rate of 15% in response to the cost management initiatives undertaken by the firm.
Insurance revenue at the end of the period under review was US$40,33 million, up from a prior year comparative of US$24,48 million.
The slower growth of expenses saw the firm record other operating and administration expenses of US$3,03 million at the end of the period under review US$2,64 million.
Old Mutual Insurance was also able to benefit from US$891 000 foreign currency gain during the period under review that supported overall profit after tax.
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“We remained focused on establishing and maintaining trust with out customers by providing them with products that are suited to their specific needs. During the year, we achieved this through product enhancements and innovation,” Zamchiya said.
“We launched the Womensure product, a comprehensive motor insurance product addressing the specific needs of female drivers. Key features include enhanced cover for loss from smash and grab incidents, emergency response and roadside assistance.”
He said the insurer also introduced the Old Mutual Hospital Cash Plan, a hospital cash plan policy distributed by our bancassurance partners bundled with their lending products to cover incidental expenses during hospitalisation.
“We have also increased visibility of the homeowners’ insurance during the period having seen that general insurance penetration for the product is low, through marketing activities and social media campaigns that raised awareness on the importance of home insurance cover,” Zamchiya said.
“The policy covers damages to the building or contents of the home caused by fire, lightning, theft, storms, earthquakes and more, giving the customer peace of mind that their home is protected against unforeseeable events. These covers become more important given the adverse effects of climate change being witnessed, he said.
Zamchiya said the insurer had continued to enhance its broker relationships and bancassurance partnerships to grow and retain the level of business underwritten.
“We strengthened existing relationships with our key brokers and established new distribution partnerships with another bank partner and a retailer, increasing our distribution and client servicing centres,” Zamchiya said.
“During the period, we were able to maintain a high business retention rate of 92% and also attracted new customers who contributed 20% of the total business for the year.”
Total assets were US$28,98 million for the period under review, from US$22,21 million in the previous year.
Liabilities also increased by 41% due to an increase in insurance contract provisions arising from the application of IFRS (International Financial Reporting Standard) 17.”
IFRS 17 is expected to have a significant impact as insurers will need to invest in new systems, processes and staff training to comply with the new requirements, according to accounting consultants. The international standard offers a new way in accounting for insurance contracts.
The subsidiary will focus on creating more insurance products and innovations this year, Zamchiya said.
