FBC Insurance to focus on new product development
FBC Holdings Limited says its insurance business, FBC Insurance, will focus on new product development with a special focus on micro-insurance as it targets to grow its market in the previously excluded segment.
Micro-insurance is largely a type of insurance designed for affordability and inclusivity, and mainly targets low-income clients, who cannot access mainstream insurance services or equivalent government programmes.
According to the 2018 Landscape of Microinsurance in Africa study conducted by the Micro Insurance Network, only two percent of Africa’s low-income population is currently served by micro insurers.
Mr Herbert Nkala, the group’s chairman, said Zimbabwe’s insurance industry continues to face challenges on the backdrop of economic volatility and the Covid-19 pandemic while the sustained inflationary environment in the past years has negatively affected the uptake of Insurance products due to lower disposable incomes.
“In response to current market dynamics, the group’s insurance businesses remain focused on product development and penetrating new market segments, with special focus on micro insurance,” he said in a statement of the financials to June 30, 2021.
He noted that following a return to multi – currency, the Insurance and Pensions Commission (IPEC) authorised insurance companies to underwrite insurance in foreign currency and this provided the industry with the capacity to hedge against inflation and exchange rate volatility. During the period under review, the group’s net insurance premium earned was 40 percent ahead of the same period last year, at $635,16 million as the insurance portfolio has remained susceptible to the subdued economic activity and general reduction of consumer disposable income.
Mr Nkala said the economic outlook for the near term is optimistic, and there were hopes that the on-going inoculation exercise will result in significant progress towards the attainment of national herd immunity thresholds and lead to the gradual relaxation of Covid-19 induced restrictions.
He said downside risks relate to the possible resurgence of new Covid-19 variants, which pose potential threats to both humanity and economic activity.
Despite the negative impact of Covid-19, group financial performance showed resilience, registering a profit before tax of $1,16 billion and an after tax profit of $529,14 million.
This performance was largely anchored on the group’s core business revenue lines which accounted for 66 percent of total income.
“The group’s strategic thrust of intensive investment in digitalisation and hedging strategies contributed largely to overall performance.
The group achieved a total income of $4,75 billion for the period, representing a 34 percent decline from the prior year’s corresponding period performance.
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