Fidelity Life Assurance (FLA) is awaiting regulatory approval to complete the separation of assets exercise, a move that will clearly divide assets between shareholders and policyholders.
According to Livingstone Gwata, the chairman of Fidelity Life Assurance, the final reports and assessments by the appointed financial advisor and policyholder representative actuary have been completed.
“The asset separation exercise is now in its final transaction stage. We await regulatory approval to finalise the transaction which will see the distinct allocation of assets between policyholders and shareholders,” Gwata said.
He said that as a means of enhancing compliance with the legal requirements for asset separation and enhancing good governance in the insurance and pension sectors, the exercise will identify assets that may have been improperly transferred from policyholders to shareholders or vice versa, quantify the assets that may have been improperly allocated, and apportion them to their rightful owners.
The assets of shareholders and policyholders will be physically divided, with the results of the exercise expected to be revealed during the next results presentation.
The Insurance and Pensions Commission (IPEC), which oversees the insurance industry, said the goal of these legal provisions on asset separation is to prevent the transfer of assets from policyholders to shareholders and vice versa.
In its financial results for the six months to June 30, 2023,insurance contract revenue grew by 163% compared to the same period prior year to ZWL$4.4bn from ZWL$1.7bn reported in the prior comparative period.
Insurance contract revenue was driven by significant growth in new policies written and increase in United States dollars denominated business.
“The proportion of the United States dollars business constituted 77% of the total insurance contract revenue compared to 25% in the same period prior year.
The main driver was the higher than insurance revenue growth in insurance service costs due to in inflationary pressures obtaining in Zimbabwe and in the regional operation.
Profit for the group increased by 123% to ZWL45.4bn in the review period from ZWL$20.3bn reported in the prior comparative period as a result of the significant increase in insurance contract revenue and fair value gains in investment properties.
Local and international partnerships, according to Gwata, continue to support business performance and provide significant leverage in providing value to Fidelity clients.