Insurance Company Sanlam Kenya sunk into a Ksh1.98 billion loss during the financial year ended December 31, 2018, representing a 363% negative spiral from the previous year when it posted a Ksh53 million profit after tax.
The company’s audited financial statements show that the insurer’s total income also plunged to Ksh5.1 billion from Ksh7.3 billion during the period under review.
Chief executive Patrick Tumbo attributes the staggering loss to a difficult operating environment occasioned by the dwindling fortunes of firms that the insurer was banking on to boost its revenues including Athi River Mining (ARM-under administration), Real People (a credit only micro finance bank with links in South Africa) and Kaluworks (a metal products manufacturing company owned by the Chandaria family).
“Several institutions in which the Group’s long term insurer had invested came under financial distress which led to the impairment of approximately Ksh1.14 billion, “says Tumbo.
According to the chief executive, the company also revised its reserving basis to reflect a more prudent modus oparendi recommended by the Insurance Regulatory Authority (IRA) which led to a reduction in revenues to the tune of Ksh650 million.
“Though these events are non-recurrent in nature, their overall impact led to the Ksh1.9 billion net loss,” added Tumbo.
Due to the company’s woeful perfomace, Sanlam’s Chairman John Simba says that the board will not be recommending payment of dividends at the forthcoming Annual General Meeting (AGM) slated for Thursday, May 9, 2019.