Britam Holdings first half after tax profits dropped 55 per cent, recording Sh995,098 compared to Sh1.78 million recorded same period last year
The insurer’s net profits dropped from Sh2.87 million last year to settle at Sh1.28 million, representing a whopping 44.6 per cent drop
The huge drop is attributed to poor economic situation in the country, characterised by high inflation and simmering political environment.
The country recorded 4.7 per cent GDP with inflation rate averaging at 9.6 per cent. Most people opted to spend on basic needs like food, shelter and clothes.
Even so, the firm’s comprehensive income for the first six months of the year increased to Shs1.9 billion compared to Shs1.88 billion for a similar period last year. T
The insurance business, which accounts for 66 per cent of the group’s total revenues, remained the key driver of business, registering 10 per cent growth of Shs9.7 billion compared to Shs8.9 billion during similar period last year.
Investment income increased by 15 per cent from Shs2.1 billion in 2016 to Shs2.2 billion as at June 30th this year.
The group’s regional insurance businesses contributed Shs1.2 billion in revenues, accounting for 13 per cent of net earned premiums, 12 per cent of total income and 6 per cent of the total assets of the group. The total assets of the group increased to Shs90.6 billion, up from Shs83.6 billion as at 31st December 2016.
Assets Under Management (AUM) by Britam Asset Managers, a subsidiary of the group, grew by 14 per cent from Sh108.9 billion in December 2016 to Sh124.5 billion as at June 2017 while fund management fees increased to Sh11.7 billion compared to Sh11 billion in June 2016. Within this period, the group successfully rolled out an asset management company in Uganda, the first in the region outside Kenya.
Speaking during the release of the firm’s half-year results, Britam Group Managing Director, Dr Benson Wairegi said the company has made significant progress on key strategic objectives outlinAssets Under Management (AUMed in the company’s “Go for Gold” 2016 – 2020 strategy.
“We have started to realize gains from the implementation of the new strategy, through the automation of key processes across all our business lines in life Assurance, general insurance, and asset management,” Dr Wairegi said.
Dr Wairegi said the successful implementation of the single distribution model where the company’s financial advisors are now cross-selling and up-selling insurance and investment products had optimized operational synergies across all branch networks in the company, leading to an increase in the revenues of the group.
He said that the group had invested heavily in IT, and had successfully rolled out digital distribution channels for some key products such as the Money Market Fund which is a unit trust and Imarika, a Unit-linked investment policy which offers investment and life insurance protection cover.
“As a result of the implementation of the new strategy, we have witnessed growth in the general insurance business which has seen the company increase its market share in the country to position three from number five last year,” Dr Wairegi said.
The general insurance business had also unveiled a highly specialized motor assessment centre that offers both convenience and professional service to customers, while allowing for fast assessment and processing of motor vehicle claims. There are also plans to roll out a 24-hour customer service centre to respond to the growing needs of the customers and also enhance the customer experience.
He said the group has continued to implement its property strategy, with the construction of its flagship project, the 31-Storey Britam Tower now complete and awaiting occupation. The construction of the Sh3.3 billion serviced apartments in Kilimani, set to be completed in 2019, is on course.
The decision to venture into property and real estate development is part of the group’s diversification strategy meant to reduce portfolio risk and exposure to the volatile stock exchange market, while addressing the gap in the real estate market.