Britam Holdings has returned to profitability, announcing a pre-tax profit of Ksh4.2 billion in 2016 compared to a loss before tax of Ksh1.2 billion in the previous year. The main contributor to other comprehensive income in both 2015 and 2016 are losses resulting from disposal or revaluation of strategic investments in equities.
Shareholders will, meanwhile, earn Ksh581.5 million in dividends after the board recommended a final payment divided of 30 cents per share.
During the year, the Group’s asset base increased by 8% to Ksh83.6 billion, up from Ksh77.6 billion in 2015. Total comprehensive income for the group grew to Ksh784. 7 million, compared to a loss of Ksh3.2 billion in 2015. The main contributor to the difference between the reported profit before tax and the total comprehensive income in 2016 were losses resulting from disposal or revaluation of strategic investments in equities.
The group’s life business registered a sustained growth in 2016, with gross earned premiums growing by 19% to Ksh8.8 billion compared to Ksh7.4 billion in 2015. Ordinary life premiums increased by 20% while pension contribution increased by 94% driven by sales from the existing network of over 3, 800 financial advisors.
Non-life business gross earned premiums declined by 6% from Ksh12.2 billion in 2015 to Ksh11.5 billion in 2016 as a result of the froup adopting a more stringent credit policy to mitigate the risk of non-collection of premiums and the adoption of claims handling expenses reserves not previously included. As a result of these changes, the profit arising from this business segment increased to Ksh1.0 billion from a loss of Ksh92.6 million in 2015.
Going for gold
Net insurance benefits declined by 53%. To ensure compliance with requirements of the Insurance Act as amended by the Finance Act 2015 and as required by the Insurance Regulatory Authority (IRA), the Group adopted the Gross Premium Valuation (GPV) methodology which is a change from the previously applied Net Premium Valuation (NPV). This change resulted in a reduction in the net insurance benefits and claims by Shs 5.2 billion.
Britam Group Managing Director Dr Benson Wairegi said that the froup had unveiled a new strategy that will help propel the company to the next phase of growth. Dubbed “Go for Gold”, the new 2016-2020 strategy is anchored on five strategic pillars of enabling transformation, operational excellence, customer service, Innovation, and Profitable growth.
“The new strategy will be a key platform to deliver the organisation’s next wave of growth, to deliver profitable growth to shareholders,” Dr Wairegi said.