Prima Reinsurance Plc recorded a 13% contraction in Gross Written Premium (GWP) amounting to K33.182 million in 2018 compared to K38.44 million in the previous year.
In an abridged financial statement results for 2018 posted on Lusaka Securities Exchange (LuSE), the company attributes this to its decision to adopt a deliberate policy to forfeit organic growth and focus on quality and credit worthy business.
The first Zambian wholly owned reinsurance company says its net claims reduced from K5.20 million in the previous year to K1.728 million in the current year.
The company has attributed this to prudent underwriting.
“Due to the implementation of IFRS 9 in the year 2018, the company recognised an impairment loss of K12.8 million in respect of the insurance receivables as at 31 December 2018. This resulted in the loss of K1.555 million for the year compared to a profit of K3.141million in the previous year,” said Prima Reinsurance.
Prima Reinsurance said there was an increase in other income from K4.06 million to K4.38 million attributed mainly to the appreciation in the kwacha against major foreign currencies.
The company stated that its balance sheet decreased with total assets recorded at K57.70 million from K65.66 million in the previous year as a result of the impairment loss.
“Current liabilities decreased from K20.27million in the previous year to K15.50million in the current year due to the decrease in the unearned premium reserves and repayment of bank overdraft,” it said.
“The company’s solvency margin remains above 170%. The basic earnings per share declined from K0.10 to K0.05.”
Highlighting the future Outlooks, the company said it continues to consolidate its position in the domestic market whilst deepening its footprint across Africa doing business with over 15 countries.
“Prima Re is also diversifying its investment portfolio in order to maximise shareholders returns,” said Prima Reinsurance.
And on dividends, the company said the Directors do not recommend the payment of a final dividend for the year ended 31 December 2018 in view of the financial results recorded as highlighted.