Diversified financial services group, Britam Holdings has returned into profitability, announcing a pre-tax profit of Sh4.2 billion in 2016 compared to a loss before tax of Sh1.2 billion in the previous year.
The growth is attributable to a one off sell of assets.
The Group’s asset base increased by 8 percent to Sh83.6 billion, up from Sh77.6 billion in 2015 while total comprehensive income for the group grew to Sh784. 7 million, compared to a loss of Sh3.2 billion in 2015.
Life business registered a sustained growth in 2016, with gross earned premiums growing by 19 percent to Sh8.8 billion compared to Sh7.4 billion in 2015.
Ordinary life premiums increased by 20 percent while pension contribution increased by 94 percent driven by sales from the existing network of over 3, 800 financial advisors.
Non-life business gross earned premiums declined by 6 percent from Sh12.2 billion in 2015 to Sh11.5 billion in 2016 as a result of the Group 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 Sh1.0 billion from a loss of Sh92.6 million in 2015.
Net insurance benefits declined by 53 percent. 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 Sh5.2 billion.
Fund management fees from the Asset Management business grew by 29 percent to Sh929.2 million compared to Sh718.5 million in 2015.
The increase is attributable to growth in Assets Under Management (AUM) by 20 percent to Sh108.9 billion from Sh90.5 billion in 2015.
Speaking during the release of the group’s full year financial results for 2016, Britam Group Managing Director Dr Benson Wairegi said that the Group 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.
In light of the good performance, shareholders will earn Shs 581.5 million in dividends after the board of directors recommended a final payment divided of 30 cents per share.