Sanlam Kenya has shrugged off pre-election fears of an expected slow down in business.
In a statement to its shareholders, published in the company’s annual report, Sanlam Kenya Group Chairman, Dr John Simba said the firm’s positive optimism is underpinned by strategic efforts to expand Sanlam Kenya’s new distribution channels and the introduction of new products to accelerate growth.
“This year is an election year in Kenya and, as in all elections, business performance is expected to remain muted. The effects of the drought are also expected to be felt throughout the country, impacting on growth and exerting inflationary pressures on the economy,” said Dr Simba.
“Sanlam, however, remains optimistic of improved performance on the back of our continuous innovation, exploring new distribution channels, bringing to market new products and serving our customers with diligence.”
Speaking at the AGM, Sanlam Kenya Group CEO Mugo Kibati, assured the firm’s shareholders’ that the new corporate strategy adopted last year has begun to bear fruit. The strategy is focusing on clear integration of the group’s business divisions to unlock value.
“The General business has turned around and we are looking forward to better results this year. At the moment, we are restructuring the life business with enhanced human capital and market focused products,” Mr Kibati said.
The economy ordinarily takes a dip every five years as businesses hold back investments awaiting the outcome of the elections.
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Several agencies including the World Bank have projected the sub-six per cent growth, though. Last week, the World Bank forecast Kenya’s GDP growth would decelerate to 5.5%, a 0.5 percentage point mark down from the 2016 forecast, over poll jitters and drought.
Economic challenges this year have included the slowdown in credit growth for the private sector and the rise in global oil prices.
In February, the Central Bank of Kenya downgraded economic growth forecast to 5.7% in 2017 from 5.9% last year, citing uncertainties in the global economy. The economy grew at 5.8% in 2016.
“The decline in the GDP growth rate was reflected in slower growth in gross premiums in the insurance industry of 7.3% from 12.8% in 2015,” said Mr Simba.