FBC Re bounces back to profitability
FBC Reinsurance (FBC Re) bounced back to profitability in the year to December 31, 2023, from a $2,6 billion loss recorded during the prior year comparative period.
According to the financial services group, the unit achieved a profit before tax of $7,3 billion, supported mainly by investment income.
To enhance its product portfolio and consolidate its market share, FBC Reinsurance is developing new products focusing on agriculture, health, and funeral business.
“The introduction of these new product segments is aimed at increasing the company’s underwriting capacity and improving the quality of earnings,” said FBC Holdings Group chief executive officer Mr Trynos Kufazvinei in a performance update for the period under review.
Additionally, FBC Reinsurance is a signatory to the Nairobi Declaration on Sustainable Insurance, which is supported by the United Nations Environmental Programme (UNEP).
The declaration encourages insurance practitioners in Africa to collaborate in the implementation of sustainable insurance solutions.
Leveraging its geographical footprint in Botswana, FBC Reinsurance aims to explore opportunities to collaborate in the deployment of sustainable insurance risk solutions.
Meanwhile, the reinsurance business’ sister company, FBC Insurance reported a $3,8 billion profit before tax jumped 65 percent to $3,79 billion from last year’s $2,3 billion.
Mr Kufazvinei highlighted that the gap between the premiums collected and claims paid has been widening due to the foreign exchange rate differentials in the economy.
During the period under review, the economy faced a myriad of challenges.
Zimbabwe has faced increased global turmoil over the years, notwithstanding an expansionary monetary policy that has added initial pressure on inflation and the exchange rate.
During the past financial year, the economy battled limited foreign currency availability, inflation weighing on disposable incomes, exchange rate volatility and the wide disparity between official and parallel market rates.
“This has made it difficult for industry players to meet the expectations of both policyholders and fund members. As a result, FBC Insurance is focusing on increasing the underwriting of foreign currency-denominated businesses to preserve value,” said Mr Kufazvinei.
During the review period, Statutory Instrument 81 of 2023, also known as “no insurance premium, no cover,” was introduced to protect the insurance industry from dishonest creditors.
The regulation aims to enhance the industry’s liquidity and claims settlement capacity. As a result, Mr Kufazvinei revealed that FBC Insurance would continue to evaluate the company’s asset and liability management strategies to align revenues with the risk-based capital requirements.
Overall, the country anticipates broader financial market regulations, as both monetary and fiscal authorities strive to address market liquidity, price and exchange rate disparities, as well as public debt arrears to support economic growth and job creation.