Resolution Insurance recorded a major loss for the second year running after significant investments in structures, IT systems and personnel dented its revenues. The investment was made to support its diversification strategy, which also involved increasing branch network from three to 10 in the course of the year.
Consequently, the insurer registered an after tax loss of Ksh246 million against a loss of Ksh140 million posted in 2014. “These investments had a one-off effect on the bottom line with returns expected in 2016 onwards. The company also made a one-off recognition of excise duty tax on reinsurance commissions of Ksh136 million and restated the prior year numbers accordingly,” Nduati said.
The insurer forecasts a positive outlook for this year given the expansion of branch network in the counties with a growth plan to grow the business from Ksh3 billion to Ksh5 billion and a strategy to attract new consumers to insurance.
Resolution Insurance recorded a 21 percent increase in its total income for the 12 months ended December 31, 2015.
The audited results released by the insurer show gross written premiums increased from Ksh2.5 billion to Ksh2.9 billion on the strength of a growing SME and retail portfolio even as assets went up 37 percent to stand at Kshs 6.3 billion from Kshs 4.6 billion
At the same time, the main shareholder, LeapFrog Investments is on course to inject Ksh1.1 billion new capital in support of the diversification strategy as a fully-fledged general insurance business. This financing is part of Ksh 2.5 billion investment due to be completed by the end of the year.
“In December last year, the shareholders approved an injection of Kshs 1.1 billion additional capital which is part of Ksh2.5 billion investment to be completed by the end of the year in order to comply with the Risk-Based Capital requirements by the regulator that takes effect in June 2016,” Resolution Insurance Group CEO Peter Nduati said.
This is the second time that the Resolution Group will be raising new capital as part of a four-year strategy to move it to the top tier of the industry. The firm raised Kshs 1.67 billion (US$ 18.7 million) in November 2014. Total income increased from Ksh1.4 billion to Ksh1.7 billion on the strength of gross earned premium, commissioned earned, net earned premium and new written premium.
Subsequent to LeapFrog Investments acquisition of a majority stake the business has been consolidated to focus on both medical and general insurance with operations in the wider East African region.
Resolution Insurance offers a number of products namely Medical, Motor, Travel, Property, Asset and Liability Insurance Plans as well as all other classes of General Insurance. It has a presence in Kenya, Uganda, Tanzania and South Sudan.
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