Sanlam Kenya has defied the profit loss trend by financial and Insurance sector in the country to post a 487 per cent increase in profits for 2016 trading year, boosting its share earnings by 46.5 per cent.
Announcing the results, Kenya Group chief executive Mugo Kibati attributed the growth to improved performance by the firm’s General Insurance Business-Sanlam General Insurance- which cut its 95 per cent underwriting loss.
According to the report, the firm said profit for 2016 grew to Sh317 million from Sh54 million in 2015 while earnings per share increased to Sh630,000 compared to last year’s Sh430,000.
This is good news to the country’s insurance sector, considering that the general insurance last year suffered 18 per cent profit loss to register Sh14.1 billion
The industry regulator insurance Regulatory Authority (IRA) attributed the loss to underwriting loss, meaning that premiums collected on insurance policies by insurers also fell below the expenses incurred.
According to IRA report, 15 out of 36 insurance companies suffered from underwriting losses in that financial year. The loss translated to 114 per cent drop compared to the previous year.
In that year, Britam for instance sunk into a Sh1 billion loss, reversing a net profit of Sh2.4 billion in the previous period as higher expenses and the stock market downturn took a toll.
In spite of good results, shareholders have nothing to smile about.
This, after the board proposed that all earnings be retained to boost capital adequacy.
According the firm, it plans to spare dividends to boost its liquidity in 2018 when the new risk based capital regime significantly increase the capital requirement for the group’s life and insurance businesses.
‘’The board therefore does not recommend payment of a dividend for the year ended 2016,” said Kabati
The firm rebranded from Pan Africa Insurance Holdings in August last year, with Pan Africa Life, Pan Africa Asset Management, Gateway Insurance and Pan Africa Securities rebranding to Sanlam Life Insurance, Sanlam Investments, Sanlam General Insurance and Sanlam Securities respectively