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sanlam Kenya CFO Victoria Impomai, Group Chairman Dr. John Simba and Group CEO Mugo Kibati

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Sanlam bounces back to post Sh317 million pre-tax profit

Sanlam Kenya CFO Victoria Impomai, Group Chairman Dr. John Simba and Group CEO Mugo Kibati

NAIROBI, Kenya, March 2 – Sanlam Kenya Group has announced a Sh317 million full year 2016 pre-tax profit jump up from Kshs 54million posted the previous year.

The financial services NSE listed firm confirmed that the profit before tax jump is largely attributable to improved performance by the firm’s General Insurance Business-Sanlam General Insurance- which has managed to book a 95 percent reduction in its underwriting loss in line with growth in top line and prudent reserving.

Sanlam had issued a profit warning in December 2016 but withdrew the notice last month following what the company said was a reduction in the level of actuarial reserving for its life insurance businesses.

The group’s CEO Mr. Mugo Kibati has reiterated that the revision of profits had been necessitated by a reduction in the level of impairment provisions – earlier considered for some of the firm’s investments in Chase Bank (In-Receivership).

This year, Sanlam Kenya is proposing to retain dividends payable as it seeks to build its capital reserves to ensure full compliance with the new Risk Based Capital and regulatory regime.

Speaking at an Investor and media Briefing session hosted by the firm Kibati said the firm’s performance had been affected by a number of market challenges experienced within the year under review.

Some of these challenges, included a depressed performance of the stock market, changes in the life business valuation and developments in the local banking sector.

The firm, he said, had however managed to weather some of the challenges with significant growth from its General Insurance and Asset Management businesses even as the Life Business suffered slower growth last year.

Kibati said the insurance arm had grown its gross written premium by 58 percent to Sh1b up from Sh633m achieved in 2015, with loses reducing by 92 percent to Sh 24 million.

“The group achieved numerous milestones despite a difficult year. Going forward, we will keep investing in our operational capacity to better serve our target customer needs and fully exploit existing and emerging growth opportunities,” Kibati assured.

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At Sanlam Investments, the operating profit increased from Sh24 million posted the previous year to stand at Sh46m in a move attributable to the growth in revenues. The growth, Kibati explained, has remained consistent to the firm’s growth in its Assets Under Management (AUMs) as well as enhanced cost efficiency.

Fee income from Sanlam Investment also jumped 31 percent to Sh156 million up from Sh119m on account of satisfactory growth in assets under management and performance fees earned based on significant outperformance of its prudent investment benchmarks.

Last year, Sanlam Life Insurance posted a 5pc Gross written premium drop to Sh4.4 Billion down from Sh4.6 Billion achieved in 2015 even as its Investment portfolio earnings increased by 50pc from Sh1.4 Billion in 2015 to Sh2.1 Billion in 2016.

The company will be maintaining its focus on the implementation of its robust five-year growth strategy. The strategy last year was headlined by a strategic rebranding process with all the former Pan Africa Insurance Holdings subsidiaries adopting a single identity under the Sanlam brand.

In Africa, the Sanlam Group continues to enjoy pride of place as the single largest non-bank financial services provider with interests in life, general insurance and wealth management solutions among others.

Locally, the group is making steady progress with the implementation of its new five-year strategy. Beyond the rebranding programme, the new strategy has also seen a significant transformation for the firm’s life and general insurance business distribution channels, as well as investment in capacity to support accelerated future growth.

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