FBC Reinsurance (FBC Re) has rebounded to profitability for the year ending December 31, 2023, recovering from a loss of $2.6 billion recorded in the previous year’s comparative period.
The financial services group disclosed that the unit achieved a profit before tax of $7.3 billion, primarily driven by investment income.
In an effort to expand its product portfolio and strengthen its market position, FBC Reinsurance is developing new offerings focused on agriculture, health, and funeral services. According to Mr. Trynos Kufazvinei, CEO of FBC Holdings Group, the introduction of these new product segments aims to enhance the company’s underwriting capacity and improve earnings quality.
Furthermore, FBC Reinsurance is committed to sustainable practices, evidenced by its endorsement of the Nairobi Declaration on Sustainable Insurance, supported by the United Nations Environmental Programme (UNEP). This initiative encourages collaboration among insurance practitioners in Africa to implement sustainable insurance solutions.
Capitalizing on its presence in Botswana, FBC Reinsurance seeks to explore collaborative opportunities in the deployment of sustainable insurance risk solutions.
In related news, FBC Insurance, the reinsurance business’s sister company, reported a profit before tax of $3.8 billion, marking a 65 percent increase from the previous year’s $2.3 billion. Mr. Kufazvinei noted that the widening gap between premiums collected and claims paid is attributable to foreign exchange rate differentials in the economy.
The economic challenges faced during the review period, including limited foreign currency availability, inflationary pressures, exchange rate volatility, and disparity between official and parallel market rates, have impacted industry players’ ability to meet policyholders’ expectations. Consequently, FBC Insurance is focusing on increasing the underwriting of foreign currency-denominated businesses to safeguard value.
Also read: Govt introduces ZiG200,000 civil penalty for violating official exchange rate
During the review period, the introduction of Statutory Instrument 81 of 2023, also known as the “no insurance premium, no cover” regulation, aimed to protect the insurance industry from dishonest creditors and enhance liquidity and claims settlement capacity. Mr. Kufazvinei stated that FBC Insurance will continue to assess asset and liability management strategies to align revenues with risk-based capital requirements.
Looking ahead, amid expectations of broader financial market regulations, both monetary and fiscal authorities are working to address liquidity, price, and exchange rate disparities, as well as public debt arrears to support economic growth and job creation. Mr. Kufazvinei emphasized the group’s readiness to leverage market opportunities and sustain shareholder value through efficient and agile business operations.
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