Professional Insurance – 2016 Half Year Review

Navigating any tough terrain requires an astute mindset that is clear on objective. The insurance industry in 2016 has continued to see a blood bath of competition that has seen both local and Multinational Corporations (MNCs) compete for the souls for Zambians on trust, loyalty and continued monthly premiums. From Inonge Susan Wambulawae’s mid-year review statement, we see signals that show the management team understands the environment they are operating in. She acknowledges that although macro forces have been dire, her firm has been able to navigate the bloody waters and generated value for investors. One aspect she notes, which we at TFHZPC believe is often ignored by many local firms, is stakeholder management from customers, to brokers. This has been one of the sources of its competitive advantage. In addition, incorporating assurance, technology, and quality human resource into their core business is the key strategy that their CEO Geofrey Chirwa believes enabled them to sustain competitive advantage.

At midyear, their revenue was up 36.1% compared to mid-year 2015. Profit before interest and Tax was up by 30.7% which led to positive earnings growth of 28.8%. This meant the firm’s EPS rose from K5.05 to K6.50. Return on equity was up from 12% to 13%:  a positive signal for shareholders who are aware that the global financial problems are really impacting businesses in all countries.


Going forward, taking leaf from Hon. Margaret Mwanakatwe’s statement at the 2016 Insurance Week, which ran under the theme “Insurance for all: for your peace of mind”, on the lack of uptake on insurance products by the Zambias should signal an opportunity for PI to aggressively pursue the segments that remain unsubscribed.

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