Afre changes name to First Mutual Holdings Limited

Published: 10 June 2013

Afre Corporation has changed its name to First Mutual Holdings Limited after an independent consultant told the firm that the current brand has a low visibility in the market and lacks clear association with its subsidiaries, outgoing chairman Innocent Chagonda told the AGM this morning.

"The Consultant recommended that the Afre Corporation brand undergo a complete rebranding that reflects the views and aspirations of all stakeholders…The new name draws in the history and legacy of the brand to emphasize stability.

"This is a name that has strong meaning and equity within the market and allows the brand to compete on both a local and international level," he said.

Chagonda also announced his departure from the board and he will be replaced by Oliver Mtasa.

Presenting on the trading update, group CE Douglas Hoto noted a 14% increase in gross premium written from $29.43 million in April 2012 to $33.59 million in April 2013.

Total income went up by 18% to $31.50 million while net premium written improved by 19% to $29.53 million.

He further noted that rental income also went up by 12% to $2.533 million and claims closed 44% higher at $14.73 million from $10.23 million in the comparative period.

"The total income is 18% up ($31.50 million vs $26.70 million)… If you take the growth in the income there is a net increase on the claims and it is important to point out that there are two main areas of concern. One is the health and insurance business. We made a call at our last meeting with shareholders that the claims ratio which was sitting at about 67-70% was below the expected long-term…position of that business.

"So in the Q1 there has been a significant increase in those claims of almost about $1.5 million and we expect this to taper off as we go towards the end of the year," he said.

He added that they have also taken a conservative view in terms of reserves for all the outstanding claims.

Technical profit dropped by 23% to $4.530 million from $5.883 million while PAT decreased by 14% from $6.601 million in 2012 to $4.052 million in 2013 but Hoto said he expects F13 earnings to be ahead of F12.

"The investment income of the group was up 224% ($4.716 million vs $1.455 million) mainly because of the bull-run that happened on the ZSE in the first four months of the year," he said.

The group's directors were re-appointed and fees of $153 404 approved while auditors Ernst and Young Chartered Accountants were re-elected with remuneration of $518 878 also approved.

- zfn