Insurer and financial services provider Sanlam Kenya has posted a Ksh99.1 million loss for the half-year ended June 2020, compared to the Ksh639.7 million profit after tax the company posted at a similar period the previous year, the group’s unaudited results show.
Speaking while releasing the results on Thursday, Group Chief Executive Patrick Tumbo attributed the loss to the COVID-19 pandemic which he stated reduced the ability of both corporates and individuals to spend on insurance.
“The Coronavirus pandemic affected the supply of goods and services as well as consumption at all levels, both locally and globally. Corporate earnings were greatly affected in key segments of the economy, such as manufacturing, agriculture, transport, hospitality and financial services,” said Dr Tumbo.
“The insurance industry was not spared as the knock-on effects in other segments. Experts have revised the economic growth projections for the country, pointing to a possible contraction in GDP by 1% in the current fiscal year with recovery only expected in 2021,” added Dr Tumbo.
In the wake of the poor financial performance and the uncertainty surrounding businesses at the moment, Dr. Tumbo confirmed that the Sanlam board has decided to set aside additional reserves to mitigate against future shocks.
The last time that the insurer posted a loss was when it reported a Ksh1.97 billion loss for the full financial year ended December 2018 before bouncing back to post a Ksh144 million profit for the full year ended December 2019. The company appeared to have fixed a leaking roof.
The group’s income from gross written premiums fell from Ksh4.68 billion in the first half of 2019 to Ksh4.26 billion at the end of the first half of 2020.
Net earned premiums however rose from the Ksh2.76 billion posted in H1 2019 to Ksh3 billion in H1 2020.
The group’s balance sheet increased to Ksh30.2 billion during the period under review up from Ksh29.9 billion.
Net claims and benefits to policy holders increased to Ksh2.47 billion up from the Ksh1.99 billion posted at the end of June 2019.
Loss before tax stood at Ksh136 million vis-à-vis the Ksh937 million profit after tax posted at the same juncture the previous year.