NAIROBI, KENYA, AUGUST 24 ― Insurance group Britam’s net profit for the half-year ended June 30 dropped 1.4 per cent to Ksh981 million, as the company recorded a significant rise in its operating expense which weighed down gains in premiums.
This is down from Ksh995.1 million recorded in a similar period last year.
The drop came despite the underwriter recording an 11.3 per cent increase in net earned premiums which closed the half-year at Ksh10.8 billion, up from Ksh9.7 billion.
Gross earned premiums grew 11.6 per cent to Ksh12.5 billion from Ksh11.2 billion last year.
The gains were depressed by expenses which rose 14.8 per cent to a total Ksh15.5 billion from Ksh13.5 billion last year.
This was mainly on insurance claims and loss adjustment expenses as well as changes in actuarial value of policy holders’ benefits.
Net insurance benefits and claims during the period totaled Ksh7.5 billion, an 11.9 per cent jump from Ksh6.7 billion spent last year.
Operating expenses also went up by 13.2 per cent to Ksh4.3 billion up from Ksh3.8 billion, as commissions earned dropped by 5.1 per cent to Ksh488.5 million from Ksh514.8 million.
The Nairobi Securities Exchange listed underwriter however managed to grow its investment income and assets which totaled Ksh3.7 billion and Ksh112.4 billion, up from Ksh2.8 billion and Ksh90.6 billion respectively.
“ Shareholder’s funds increased by 27 per cent on the back of a strong performance and issuance of new shares to AfriInvest SPV III during the period. The international business contributed net insurance revenue of Ksh1.5 billion accounting for 14 per cent of the total net insurance business revenue,” the underwriter reported.
These businesses accounted for 11 per cent of the total income and seven percent of the total assets of the group.
The Assets Under Management (AUM) by the asset management business increased nine per cent to Ksh140.1 billion, from Ksh128.9 billion in December 2017.
“The group is on track in implementing its 2016-2020 strategy dubbed “Go for Gold” which is anchored on the five pillars of profitable growth, customer service, innovation, operational excellence and enabling transformation,” the management said in its quarterly financials.
The board does not recommend payment of interim dividend.
The insurer which offers a wide range of financial products and services in insurance, asset management, banking and property, is counting on a number of initiatives which include its 24-hour customer contact centre supported by a new Customer Relations Management (CRM) system to grow its business.
Other initiatives include various digital portal, mobile based products and streamlining of back office operations.
Britam has offices in Kenya, Uganda, Rwanda, South Sudan and presence in Mozambique, Malawi and Tanzania.