Sluggish business environment pulls back Zambia Reinsurance

 Sluggish business environment pulls back Zambia Reinsurance

Sluggish business environment pulls back Zambia Reinsurance.

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LUSAKA exchange listed Zambia Reinsurance PLC says it has experienced setbacks in premium collections due to the slowing business activity prompted by lack of new opportunities from key sectors of the economy.

In its first half results of 2021, the company said there was no fresh business in the manufacturing and construction sector a situation that has reduced its earnings.

“The Company has continued to operate under challenging economic conditions brought about by the pandemic. Furthermore, the Company has experienced challenges in premium collections as the general insurance business atmosphere remains sluggish, with no new risks emerging as manufacturing and construction works remain dormant,” the company said in its half year results.

Total revenue during the first six months of 2021 slowed to ZMW16, 1 million from ZMW21, 3 million same period last year.

Consequently profit after tax tumbled 65% to ZMW738 817 from ZMW2, 1 million. The company said this was attributed mainly to the absence of net exchange gains recorded in the previous year.

Despite the pandemic, the company recorded a growth of 87% in Gross Written Premium (GWP) from ZMW30, 46 million in 2020 to ZMW56, 98 million in 2021. This growth was achieved on the back of a growth strategy formulated in late 2020.

But net written premiums were down   ZMW 11, 2 million from ZMW12, 4 million same period prior years.

The Company reduced its total claims and operating expenses by 26% compared to the same period last year due to prudent underwriting and the adoption of stringent cost containment measures.

The Company’s total assets increased by 65% from the same period of the previous year and the Company recorded a solvency margin of 203%, well above the minimum statutory requirement of 10%.

The total equity increased by 92% in 2021 due to rights issue that occurred in the second half of 2020. The business remains liquid with a positive cash position.

On the outlook the company sees great times ahead.

“It is anticipated, however, that the economy will recover and we should see some activity in the market as business conditions improve. The Company will intensify its efforts to not only drive growth of the top line but also to improve the bottom line and increase market share,” the company said.

Previously known as Prima Re , the company changed its name to Zambia Reinsurance PLC, with effect from February 15 2021.

The move was adopted at the Annual General Meeting held on 30th April 2020.

The new name of the Company, Zambia Reinsurance PLC, was registered with Registration with the Patents and Companies Registration Agency as of 31 July 2020.

The Company started operations on 1st January 2007, it takes pride in being the first Zambian owned Reinsurance Company in the market and was listed on the Lusaka Stock Exchange on 30th September 2013.

Zambia Re is licensed by the Pensions and Insurance Authority, to transact reinsurance business in respect of all life and non-life insurance business.

Fidelity Hamilton Mhlanga

Fidelity Hamilton Mhlanga has been writing finance and business news over the past 5 years. He earned a BSC in Media and Society Studies and Masters of Development Studies from Midlands State University, in Zimbabwe. He follows mining, insurance, banking and energy stories. He is passionate about development and growth.

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