Jubilee Holdings defies tough economic enviroment to post $34.1 million in half year profit

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  • Jubilee Holdings Limited has reported a half-year profit before tax of KES 4.1 billion ($34.1 million) for the period ended 30th June 2022
  • The Kenyan-headquartered insurer said its profitability had declined compared to the KSh 5.2 billion ($43.3 million) it posted in a similar period a year earlier
  • The NSE-listed insurer blamed the decline on a tough economic environment characterised by uncertainty arising from elections in Kenya and rising interest rates
  • Jubilee Holdings Board declared an interim dividend of KSh 1 per share, payable on 11 October 2022

Jubilee Holdings Limited has reported a half-year profit before tax of KES 4.1 billion  ($34.1 million) for the period ended 30th June 2022 to defy a tough economic environment characterised by uncertainty arising from elections in Kenya and rising interest rates.

On August 30, 2022, the Kenyan-headquartered insurer said its profitability had declined compared to the KSh 5.2 billion ($43.3) it posted in a similar period a year earlier.

The NSE-listed insurer added that a significant reduction in foreign investment in the securities exchange and global inflation had affected business negatively.

During the period under review, the Medical business was heavily impacted by the increase of claims experienced in the post-pandemic cycle, by a whopping KSh 460 million in the first half of the year.

Despite having transferred 62 per cent (KSh 3.5 billion) of the General business to Allianz last year, the Gross Written premium declined by only 6 per cent to KSh 20.9 billion. This was greatly offset by the significant growth of almost KES 3 billion in the long-term business.

Total assets increased by over KS h5 billion to KSh 160.5 billion. Shareholder’s Funds grew by 6 per cent to KhS 41.9 billion. Total shareholder’s equity increased from KSh 42.3 billion reported in the previous year to KSh 44.8 billion.

Commenting on the performance, Jubilee Holdings Limited Group Chairman Nizar Juma noted that the group had shown resilience in its business model while delivering strong profits and strengthening the balance sheet.

“We are continuously minimising our operating costs to increase our overall value. We remain on track in executing our growth strategy and confident of our leadership position in the insurance sector across the East African region,” said Juma

JHL is successfully executing its regional digital transformation agenda dubbed Changamk@ which will further automate processes, improve efficiency, and enhance customer experience. The Jubilee group has allocated the equivalent of US$20 million to this project over the next five years. To date, the group has already invested KES  200 million, the benefits of which are expected to accrue from 2023 onwards.

“Through Changamk@, we are investing heavily in competitive technology that will support the rapid deployment of new digital services that deliver value and quality experience to our customers. We are confident this will boost business growth in the next financial year while enabling us to constantly meet the evolving needs of our customers,” Juma said.

Jubilee Holdings Chairman Nizar Juma (l) and CEO Julius Kipngetich (r). Photo: Jubilee Holdings Limited.

Jubilee Holdings Board has declared an interim dividend of KSh 1 per share, payable on 11 October 2022.

In a related story, the Insurance Regulatory Authority (IRA) recently revealed that the insurance industry in Kenya has continued to register improved performance in the first quarter of 2022 compared to previous quarters.

The data, released on August 1, 2022, noted that gross written premiums among Kenyan insurance firms in the first quarter of 2022 went up by 11 per cent to KSh 88.43 billion from KSh 79.26 billion in a similar quarter in 2021.

Kenya: Insurance industry improves significantly in first quarter of 2022

During the quarter under review, general insurance premiums amounted to KSh 53.92 billion, while the premiums reported by the long-term insurers hit KSh 34.51 billion, a growth of 12.1 per cent compared to a growth of 18.6 per cent the previous year.

Medical and motor insurance classes maintained a leading position in terms of contribution in general insurance business premiums at 35.9% and 27.5%, respectively.

Aviation, theft, and miscellaneous classes are the only classes whose premiums decreased by 16.1 per cent, 11 per cent, and 10.6 per cent, respectively.

Deposit Administration and Life Assurance classes remained the biggest contributors to the long-term insurance business accounting for 34.4 per cent and 25.1 per cent.

The underwriting performance of the general insurance business was a loss of KSh 510.20 million, which was an improvement from a loss of KSh 1.74 billion reported in Q1 2021.

Kenya: General Insurers pay claims worth $142 million in three months

Wanjiku Njuguna is a Kenyan-based business reporter with experience of more than eight years.

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