Fidelity’s profits rise 141 percent

. . .Defies exchange losses from foreign subsidiaries &

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. . .Challenging conditions in insurance sector

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. . .Company mulls switch to informal sector

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FIDELITY Life Assurance (FLA) reported today that its profit for the half-year ended June 30, 2015 spiked 141 percent to US$3 million from US$1,2 million a year earlier notwithstanding the worsening conditions in the local insurance sector and exchange losses on earnings from its Malawian subsidiary.

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The company’s net insurance premiums climbed 15 percent from the prior year to US$8,9 million.

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On the overall, revenues increased by 50 percent to US$13,8 million from US$9,2 million year ago.

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However, income earned from its housing development project Fidelity Life Southview Park were not incorporated in the half year results as the project is yet to be completed and certified.

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The business’s Malawian unit, Vanguard Life Assurance, recorded a profit of US$130 000 million as net premium income jumped 13 percent to US$1,6 million in the review period.

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With the continued shrink of the formal sector, the company is now mulling products for the informal sector.

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“Due to the economic challenges being experienced, the insurance sector has been affected by low uptake of products, cancellation of policies, policy surrenders and late remittance of premiums.

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“The reduction is formal employment as a result of company closures calls for insurance companies to come up with innovative products that appeal to an informal market particularly in terms of pricing and distribution, which strategy the company will pursue,” said FLA’s chairman Mr Lawrence Tamayi.