Britam slid back into loss-making territory with its full year results, posting a loss of Ksh9.1 billion for the year ended December 31, 2020.
The firm had recorded pre-tax profit of Ksh4.6 billion for the full year 2019. The massive decline for 2020 was driven by a Ksh5.2 billion investment loss provision for Wealth Management Fund LLP, a fund manager under Britam Asset Managers- a subsidiary of Britam Holdings.
“The Holding Company is committed to support the fund to fulfill its obligations as they fall due, through management oversight of the fund’s operations and the agreed recovery plan,” Britam noted.
The regional insurer took a hit from losses in its investment portfolio. It booked fair value losses of Ksh2.3 billion from falling stock market valuations and Ksh2 billion from property impairments.
A reduction of the firm’s investment in Housing Finance, for instance, represents Ksh823 million of the annual loss.
Britam’s core under-writing business, however, posted a solid performance for the year. Net earned premiums stood at Ksh23.1 billion .
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The firm also demonstrated impressive performance in cash generation and asset growth
Cash inflows generated Ksh7.6 billion for Britam while assets grew by 9.4 per cent to Ksh137 billion. Assets under management (AUM) closed the year at Ksh250 billion.
Total expenses rose 22.6 per cent to Ksh.39 billion, driven up by claims and benefits paid out.
To turn things around, Britam is banking on digitization and a new organizational structure, key elements of the firm’s 2021-2025 strategic plan.
The company’s shareholders will not receive a dividend for the year’s results, after a 25 cents per share pay-out last year.