Zimre profit up 508 percent

Reinsurance group, Zimre Holdings, had a good first half despite problems that bedeviled the country such as high levels of inflation, uncontrolled monetary growth, foreign exchange shortages, high unemployment and supply bottlenecks.

Its gross premium increased by 632 percent from $5.8 billion to $42.2 billion while investment income soared 544 percent from $1.4 billion to $9.3 billion. Total revenue was up 623 percent from $7.2 billion to $52.2 billion.

Operating profit increased from $1.4 billion to $9 billion, an increase of 536 percent while net profit rose from $657.4 million to $4 billion.

The company says its investment income was boosted by the bull run on the Zimbabwe Stock Exchange. Negative returns on the money market, however, remained an area of concern.

It said 91 percent of its gross premium was from its short-term business sector. Zimre is restructuring its domestic operations. Fidelity was demerged and listed on the Zimbabwe Stock Exchange in June.

It is reviewing its regional operations to reduce the impact of the volatility of the Zimbabwean economy and raise the foreign currency requirements of its subsidiaries.

It says Zimre South Africa continues to under perform largely because of inadequate capitalisation. There are moves to recapitalise the operation.

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