MBABANE – Oracle Insurance Eswatini has reduced its net loss by over 50 per cent to E3.6 million, down from E7.6 million in the previous year.

This substantial improvement came despite ongoing challenges in the market, including asset impairments and higher-than-expected insurance claims.

Oracle Insurance is a key subsidiary of South Africa-based diversified financial services group Vunani Limited.

For the convenience of the local readership, all financial figures in this article are presented in Emalangeni (E). The Emalangeni is pegged at par to the South African Rand (ZAR), meaning E1 is equal to R1. Therefore, while the original figures in the Vunani Limited Integrated Report are denominated in Rands, the amounts remain exactly the same in Emalangeni. The performance of Oracle Insurance was published as part of Vunani Limited’s Integrated Annual Report for the year ended February 28, 2025, which provides an in-depth view of the group’s operations across southern Africa, including its footprint in Eswatini, where Oracle Insurance has operated since 2008.

Impairment

At the heart of Oracle’s financial performance was an E18.0 million impairment of the company’s Value in Force (VIF) asset—representing the present value of future pre-tax profits embedded in the company’s portfolio of life and health insurance policies. This impairment followed a revaluation of expected future cash flows from Oracle’s insurance policies and starkly contrasts the E6.6 million impairment reversal recorded in the prior year.

The VIF asset impairment underscores the extent to which changing assumptions in actuarial valuations and business expectations influenced profitability, even in a year where dividend and interest income rose significantly compared to 2024.

Oracle’s insurance-related investments performed relatively well, yielding positive fair value adjustments of E42.8 million. However, this upside was overshadowed by negative fair value adjustments of E76.8 million on insurance contract liabilities, reflecting higher-than-expected claims and a softening of reserve valuations.

In 2024, comparable negative adjustments on liabilities stood at E40.7 million, indicating a steeper drag on performance in 2025.

Despite this challenge, the insurance segment remained the largest contributor to Vunani’s group revenue, generating E278.1 million, up from E236.5 million in 2024.

A notable improvement in Oracle’s financials came from its investment income, where both dividend and interest earnings rose sharply. Dividend income from the insurance investment portfolio significantly improved due to a rebound in the performance of the underlying assets.

More impressively, interest income from investments surged to E36.4 million, up from E0.7 million in the previous year. This growth illustrates a robust repositioning of the investment portfolio amid better market conditions and higher interest rates.

Oracle Insurance Eswatini offers a comprehensive suite of both long-term and short-term insurance products in the local market. These include:

Long-term products: Group life assurance, group funeral policies, income continuation benefits and defined contribution pension and provident fund solutions.

Short-term products: Motor, home, health, commercial property, liability, business interruption and equipment insurance.

The company’s health insurance portfolio also includes major disease benefits, medical savings, in-patient cover and a rewards programme—positioning Oracle among the more diversified insurers in Eswatini.

Oracle’s strategic strength lies in its robust reinsurance partnerships with global and regional heavyweights such as Hanover Re (long-term business) and African Re Corporation (SA), supported by XL RE Europe SE, GIC Re South Africa, Ezulwini Reinsurance and others. These arrangements have helped mitigate risk and stabilise claims volatility, albeit not enough to overcome the financial headwinds in FY2025.

Dividend declaration

MBABANE – Even amid losses, Vunani Limited declared a final dividend of 35.0 cents per share, up from 9.0 cents in 2024, a move seen as a signal of management’s confidence in the group’s long-term prospects.

This may come as a relief to Eswatini shareholders and stakeholders who rely on Oracle’s performance not only for direct services, but also as part of the country’s growing financial services ecosystem.

Oracle Insurance Eswatini’s performance for the 2025 financial year reflects both the headwinds of a tough economic climate and the strength of a business navigating that storm with resilience. While impairments weighed heavily on profitability, positive signals such as increased investment income, sustained revenues and narrowing losses point to an improving trajectory.

As Vunani doubles down on its strategy to expand in the SADC region, Oracle’s pivotal role in Eswatini’s insurance landscape becomes increasingly clear. The company’s product diversity, reinsurance alliances and improving operational fundamentals suggest that Oracle is well-positioned for a turnaround—provided that market conditions stabilise and growth strategies are effectively executed.

Group-wide insurance liabilities vs assets

MBABANE – Vunani’s insurance-related investments increased to E683.0 million (2024: E606.9 million), supported by favourable fair value adjustments and new additions.

However, insurance liabilities increased even more sharply to E705.8 million, up from E616.0 million. This widening gap between assets and liabilities, though manageable, remains a risk area flagged in the CFO’s report.

Meanwhile, the report candidly acknowledges that the 2025 financial year was a difficult one. From local political uncertainty and muted gross domestic product (GDP) growth in Eswatini to global economic disruptions and weak investment sentiment, the insurance segment was among those most exposed.

Despite these challenges, Vunani management remains cautiously optimistic, especially given Oracle’s narrowing losses and strong underlying fundamentals. The focus now, according to the report, is on supporting operational performance, improving cash flow generation, and leveraging strategic partnerships—including the group’s recently finalised 30 per cent stake sale in Fairheads to Old Mutual.

Performance context within Vunani Limited

MBABANE – Oracle Insurance is part of the insurance segment of Vunani Limited, which comprises long-term and short-term insurance across southern Africa.

While Oracle’s losses narrowed, the segment overall remained under pressure, contributing to Vunani Group’s overall loss of E3.1 million, a reversal from a profit of E24.2 million in 2024.

The group attributed its subdued performance largely to non-cash adjustments including fair value losses and impairments amounting to E68.5 million, compared to a positive R9.6 million in the prior period.

Management

Despite the group’s challenging year, its diversified structure provided some resilience.

The asset administration segment remained profitable and revenues from insurance operations continued to climb, affirming the group’s longer-term strategic bets in the SADC region, especially in Eswatini, Botswana, and Namibia.

In Eswatini, Oracle’s continued relevance in the local market is supported by its experienced management team, multi-line insurance offering and solid customer base across both individual and institutional clients. According to Vunani’s annual report, Oracle is expected to play a critical role in the group’s SADC expansion strategy. Furthermore, Vunani’s broader group strategy has identified Eswatini as one of its core markets.

Expansion

This was reflected in statements within the integrated report where the group stated: “Our established operations in Eswatini and Botswana continue to progress well… we have made solid progress in the regions initially targeted for expansion.”

Vunani reported a decrease in intangible assets from E129.3 million to E98.8 million, mainly due to the impairment of the Oracle VIF asset.

This had a direct knock-on effect on the group’s balance sheet, contributing to a 9 per cent decline in net asset value per share, from 198.2 cents to 180.4 cents.

 The impairment reflects a conservative approach to valuation, aligning with global insurance accounting standards that require prudent recognition of intangible assets in volatile economic conditions.