Nairobi Securities Exchange (NSE) listed insurance firm Sanlam Kenya Plc saw a 92 per cent decline in pre-tax profit in its full year 2020 financial results – down from Ksh550 million in 2019 to Ksh43 million.
With increased claims and lower investment returns, Sanlam closed the year on a Ksh78 million after-tax loss representing a drop from the prior-year after-tax profit of Ksh114 million. The situation was primarily attributed to the Covid-19 pandemic and its effects on local and international economies.
Sanlam Kenya Plc Group Chairman Dr. John Simba further highlighted that the effects of the Covid-19 pandemic on the local economy and foreign exchange rates adversely impacted the group’s net assets valuation.
The firm’s total income rose to Ksh9.42 billion up from Ksh8.89 billion in 2019, representing a 6% growth.
Overall, Sanlam’s Gross premium income rose by 24.4 % to Ksh8.69 billion up from Ksh6.99 billion posted the previous year due to growth in both the long and short-term insurance businesses.
At a business operating level, the firm’s insurance subsidiaries, Sanlam Life and Sanlam General Insurance Ltd, generated Ksh499 million and Ksh138 million in after-tax profits.
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Sanlam Life’s Gross written premium grew to Ksh5.21 billion up from Ksh4.38 billion posted the previous year. The firm’s investment income also maintained a positive trend growing to Ksh2.33 billion from Ksh2.20 billion in the prior year. The life insurance firm’s investments continued to hold steady at Ksh26.3 billion, up from Ksh24.7 billion posted the previous year and significantly buoyed by more than Ksh20.48billion holding of government securities at the close of the trading year.
Sanlam General Insurance’s Gross written premium grew to Ksh4.06 billion, up from Ksh2.85 billion. The firm’s total income grew to Ksh2.59 billion, up from Ksh2.00 billion posted in 2019.
Simba expressed a positive outlook for 2021 with the effects of the pandemic expected to dissipate.
“The business retains a positive outlook for the year 2021 with all our operating ratios still robust. We remain committed to creating and protecting the wealth of our clients and other stakeholders through innovative product offerings and employing the most efficient processes,
“We will also continue to adapt to the evolving needs of our client base,” he noted.
He highlighted efforts that had been initiated by the firm last year in response to the tough operating environment – including securing employees’ health and jobs, cost saving, new product development, innovation and delivery of sales and services online.
The firm notably introduced innovative new products such as RetireMed in collaboration with Minet Kenya.
RetireMed is designed to assist Kenyans save for their medical expenses in retirement.
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