Business / Companies
NicozDiamond's profitability in line with budgets
22 May 2013 at 12:54hrs | Views
NicozDiamond's profitability in the 4 months to April is in line with budget expectations with the Gross Premium Written improving by 31.25% to $10.5 million as at 30 April 2013, group MD Grace Muradzikwa told the AGM this afternoon.
"The profitability of the company is currently in line with budget expectations given the renewal profiles of the business.
"As at April 2013, coming from a clean base, the company has already recorded growth levels of 29%... GPW of $10.5 million has been written as at 30 April 2013 compared with just $8 million in April 2012," she said.
"Business growth levels in 2012 were at 7% as the company took deliberate action to purify the book and let go of accounts that were not profitable and those that were also difficult in terms of collections.
Muradzikwa further noted that after experiencing high claims in 2011 the company was conservative in its reinsurance programme for 2012 resulting in a low retention of 56%.
"The reinsurance programme has been improved to ensure efficiency and profitability in 2013 and as at April 2013 the retention ratio is at 65%.
She said measures have also been put in place to minimize the cost of claims and to ensure that only authentic claims are paid out. This saw the loss ratio improving from 56% in 2011 to 51% in 2012.
Muradzikwa noted that the same measures are being intensified in 2013 and so far for April 2013 the loss ratios are sitting on about 47%.
Expenses management, as highlighted by Muradzikwa, is also a key focus area to ensure improved profitability.
"Expenses were 26% to net premium written as at April 2013 and this is a significant improvement from the 38% of December 2012 and 33% of April 2012," she said.
Furthermore, she said competition is still high and pressures on rates are still being exerted.
"The number of insurance companies on the market is at 23 players, though the new capital requirements might see shrinkage of the market," she noted.
Muradzikwa said investment performance was good in 2012 and is expected to be even better in 2013. The company is also working on a project to unlock value out of its landbanks and the project is expected to commence before the end of 2013.
"This will ensure good investment returns for the company," she added.
"During the first four months of 2013 the company also managed to be recertified on ISO 9001:2008 after a review which was done by the Standard Association of Zimbabwe.
All the directors were reappointed with directors' fees of $78 561 approved while the auditors Ernst and Young were reappointed and audit fees of $65 000 agreed on.
"The profitability of the company is currently in line with budget expectations given the renewal profiles of the business.
"As at April 2013, coming from a clean base, the company has already recorded growth levels of 29%... GPW of $10.5 million has been written as at 30 April 2013 compared with just $8 million in April 2012," she said.
"Business growth levels in 2012 were at 7% as the company took deliberate action to purify the book and let go of accounts that were not profitable and those that were also difficult in terms of collections.
Muradzikwa further noted that after experiencing high claims in 2011 the company was conservative in its reinsurance programme for 2012 resulting in a low retention of 56%.
"The reinsurance programme has been improved to ensure efficiency and profitability in 2013 and as at April 2013 the retention ratio is at 65%.
She said measures have also been put in place to minimize the cost of claims and to ensure that only authentic claims are paid out. This saw the loss ratio improving from 56% in 2011 to 51% in 2012.
Muradzikwa noted that the same measures are being intensified in 2013 and so far for April 2013 the loss ratios are sitting on about 47%.
"Expenses were 26% to net premium written as at April 2013 and this is a significant improvement from the 38% of December 2012 and 33% of April 2012," she said.
Furthermore, she said competition is still high and pressures on rates are still being exerted.
"The number of insurance companies on the market is at 23 players, though the new capital requirements might see shrinkage of the market," she noted.
Muradzikwa said investment performance was good in 2012 and is expected to be even better in 2013. The company is also working on a project to unlock value out of its landbanks and the project is expected to commence before the end of 2013.
"This will ensure good investment returns for the company," she added.
"During the first four months of 2013 the company also managed to be recertified on ISO 9001:2008 after a review which was done by the Standard Association of Zimbabwe.
All the directors were reappointed with directors' fees of $78 561 approved while the auditors Ernst and Young were reappointed and audit fees of $65 000 agreed on.
Source - zfn
