, NAIROBI, Kenya, Aug 28 – British American Investments (Britam) has posted a 77 percent decline in its first half net profit to Sh624 million compared to Sh2.7 billion recorded over the same period last year, attributable to a bearish performance of the securities market.
The firm says the performance of the market negatively impacted on the fair value of financial assets.
The insurer recorded fair value losses of Sh842.9 million compared to a gain of Sh2.9 billion in the first half of 2014.
Gross earned premiums grew by 81.7 percent to Sh10.1 billion up from Sh5.1 billion posted same period last year driven by a 63 percent growth in the general insurance business following the completion of Real Insurance acquisition in the second half of 2014.
Total revenue increased to Sh11 billion up from Sh10 billion posted last year representing a 7.8 percent increase.
The company’s total expenses increased by 38 percent to Sh10.2 billion in the period under review up from Sh7.3 billion mainly attributable to an increase in insurance claims and loss adjustment expenses that went up to Sh5.1 billion up from Sh2.1 billion recorded over the same period last year.
Going forward, management indicated that they plan to increase property to between 20 to 30 percent of its investment portfolio and cut reliance on equities to less than 30 percent.
On its property strategy, Britam Towers is set to be completed in August 2016. In addition, the insurer plans to set up serviced apartments on its 1.6 acre piece of land in Kilimani.
“The group continues to implement its growth and diversification strategy focusing on increased local and regional expansion Information Technology, innovation of products and processes and capacity enhancement,” the firm stated.
The board of directors do not recommend payment of any dividend.