Group chief executive, Tavaziva Madzinga says the market environment for the first six months of the year was “turbulent”, but management expects economic activity, in the short to medium term, to be constrained by weak consumer spending. “The high inflation environment also puts pressure on claims costs, while loadshedding in the first half resulted in increased power surge claims.
“Despite these headwinds, we are confident that the corrective actions we have implemented will start to show a positive impact towards the latter part of 2022. These are primarily in the form of underwriting actions to address the impact of increased claims costs and reinsurance rates. They include procurement efficiencies, segmented premium increases, and higher claim excesses,” he added.
“’We’ve seen an inflation surge across the board, as well as supply chain disruption and investment volatility. One aspect is about working with our supply chain, such as original equipment manufacturers and car body repair shops to keep that inflation from seeping through into claims and consequently to clients. We are mindful that customers face an economic reality with their own economic pressures,” he says.
During the period under review, headline earnings plummeted 52% to 409 cents a share from 863 cents last June, due to weaker operating results and lower investment income attributable to shareholders.