Vaka Yako boosts Fidelity revenue

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FINANCIAL services giant, Fidelity Life Assurance Zimbabwe, says uptake of Vaka Yako, an investment product launched earlier this year, has been positive.

In a business update for the nine months to September 30, 2022, Fidelity said it recorded a 100% increase in base revenue, with Vaka Yako among the drivers. The firm joined the push for affordable housing in March with the launch of Vaka Yako, a US dollar pegged investment product that could reshape the housing market in Zimbabwe.

The scheme covers all social strata, giving policyholders the flexibility to determine the amount of premiums they pay, based on earning capacity, age and other factors.

Under this program, policyholders have the flexibility to choose where they want their homes to be built, including in rural communities.

It is the latest in a series of housing projects undertaken by the listed insurance company over the past decade, including the Fidelity Southview medium-density residential project in Harare.

On Friday, Fidelity said in a business update that its life insurance business contributed 82% of the group’s total core revenue, with Vaka Yako among the drivers.

“The group’s total base revenue for the nine months to September 2022 increased by 100% in inflation-adjusted terms and 234% in historical cost terms for the same period of the previous year.

“Base revenue was driven by the life business which contributed 82% (2021: 78%) of the group’s total base revenue, supported by growth in the life business individual due to increased premium adoption of Vaka Yako investment products, aggressive premium reviews, and growth in employee benefits premium income through salary increases, indexed products, and denominated products in foreign currency,” the company said.

He said non-insurance business contributed 18% to base revenue. The micro-loan business was behind the contribution from non-insurance revenue, the company said.

Total income for the period under review increased by 393% driven by premium income, fair value adjustments to investment properties and equities.

Group profit increased by 1,532%, reflecting a change in investment property valuation methodology from US dollar valuations the previous year to Zimdollar valuations during the reporting period.

In the life and pensions business, the company said its choice of markets and products contributed enormously to the continuation of the growth trend, while for the non-insurance business, the positive results continue to be reflected on the backs of the business growth initiatives and cross-selling activities by the company.

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