Prima Reassurance has reported their half-year financial performance on SENS which shows indications that the insurance company is heading back to financial health. The following is their statement on SENS on their performance, according to the announcement released on 16th September 2020.
Performance Overview
The Company operated in a challenging environment with the onset of the COVID 19 pandemic, where it witnessed unprecedented decline in private sector economic activity. The Company initiated its Business Continuity Plan, allowing staff to continue working remotely and continue providing its services both at domestic and international levels.
Despite the pandemic, the Company recorded growth of 20% in Gross Written Premium (GWP) from ZMW25.35 million in 2019 to ZMW30.46 million in 2020. This was mainly as a result of a general increase in Life, Property and Engineering classes of business.
Further, the Company saw an increase in the net earned premium by 37% from ZMW9.07 million in 2019 to ZMW12.43 million in 2020. The Company recorded a profit after tax of ZMW1.703 million for the first half of 2020 compared to a loss of ZMW5.45 million in the first half of 2019. The increase in the profit is attributed to a reduction in operating expenses and increase in other income arising mainly as result of the devaluation of the Kwacha against the US dollar.
The Company’s financial position remains robust with total assets increasing from K 65.24 million to K 76.62 million. The net current assets position for the half year ended 30 June 2020 was ZMW33.63 million. The staff are back in the office on a weekly rotation basis of working from home, even as we follow the health guidelines provided.
Future Outlook
As a result of the projected contraction in the economic activity, the Company expects a reduction in the GWP in the second half of the year. The focus, therefore will be on cost containment and financial discipline as we are committed to remaining resilient in the face of the pandemic and providing a safe work environment.
We are pleased to announce that the Company underwent a successful capital raise in July 2020.
The capital raise was structured as a renounceable rights offer and this was underwritten by the Industrial Development Corporation (“IDC”) an investment holding company owned by the Government of Zambia.
Following this, the Company now has an authorized share capital of K 75m of which K 45m is paid up. IDC now has a shareholding of 28.17% in the Company.