FIDELITY Life Assurance of Zimbabwe (Fidelity) will expand its housing Vaka Yako product to Malawi, after the product contributed 85% of the firm’s gross premium written for its financial year ended December 31, 2024.
The Vaka Yako product, introduced in 2022, allows a person to gradually acquire a stand or house anywhere in Zimbabwe with monthly payments from as low as US$45.
Basically, the product is an individual life policy investment plan.
Expanding this product to Malawi will allow the firm to increase its foreign currency earning potential.
In a statement accompanying the company’s financial year results for the period ended December 31, 2024, Fidelity chairman Livingstone Gwata said part of the focus of the company was customer-centric products.
“Insurance contract revenue grew by 44% compared to prior year from US$7,9 million to US$11,4 million in the year under review. The group customised service approach continues to drive uptake of the company’s products offering on the market,” he said.
“The Vaka Vayo product performed very well and contributed significantly to the gross premium written at 85% of the premium inflows.
“On the premium inflows, the Zimbabwean operation contributed 68% for the year under review compared to 62% in 2023, while for the year under review, 32% was attributable to the Malawi operation which contributed 38% in 2023.”
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Gwata said the company was expected to drive product innovation and enhance customer experience.
“We anticipate a continued upward trend in premium growth anchored by our investment product Vaka Yako, also being launched in Malawi, as people search for secure long-term saving options in volatile currency environments,” Gwata said.
Already in Malawi, the firm operates Vanguard Life Assurance of Malawi (VLA) which continues to scale up its operations under new management.
“In order to diversify its revenue streams, the unit has entered the funeral service and asset management markets,” Gwata said.
“VLA has also entered into strategic partnerships both in Malawi and South Africa which are anticipated to have a significant positive impact on its revenues in the medium term.”
He said as the life insurance market was poised for growth, Fidelity specifically intended to tailor make products aimed at the diaspora market and the local informal sector.
According to official estimates, the diaspora market remits nearly US$2 billion to Zimbabwe annually, while the informal sector generates about US$14,2 billion in revenue per annum.
“Net investment income grew by 54% compared to prior year from US$5,9 million to US$9,1 million. The major drivers being fair value gains from investment property and interest income from money market investments,” Gwata said.
Consequently, the net insurance and investment result for the period under review totalled US$12,4 million from the prior year’s US$6,1 million.
“The group profit for the period increase by 178% from US$2,3 million in the prior year to US$6,4 million in the current year,” Gwata said.
“The positive profit growth was driven by the increase in insurance contract revenue, investment income, and other income.”
Total assets stood at US$91,41 million at the end of the reporting period, a significant increase from the prior year’s US$66,44 million.
Driving this growth was its investment properties, trade and other receivables and financial assets at fair value through profit or loss.
Gwata said the firm’s focus remained on enhancing customer experience, creating value for our policyholders and shareholders while positively impacting communities particularly by making financial inclusion and protections accessible.
