NAIROBI, Kenya, Jan 21 – Sanlam Kenya has issued a profit warning for the financial results ended 31 December 2021 attributed to the firm’s approach of increasing premium default and claims from COVID -19 fatalities
In a statement shared to shareholders, the Nairobi Securities Exchange-listed firm said the continued effects of the COVID-19 have continued to affect both corporate and retail segments of its businesses.
“Based on our unaudited end-of-year financial results, and information currently at the board’s disposal, we wish to report that out projected net earnings after tax for the period ended December 2021 will reflect a decline compared to the prior-year earnings,” the firm said.
“In response to the uncertainty, the business increased the level of premium debt provisioning to reflect the associated default risk while claims and related policyholder reserving was increased to ensure sufficient prudence,” it added.
The board of directors nonetheless expressed confidence in an improved operating environment over the next financial year.
“The firm continues to apply its efforts on innovation, expense management, and digitalization of key business processes to improve company efficiencies, customer offering, and sustainable shareholder returns well into the future,” the statement read in part.
In the latest Insurance Regulatory Authority (IRA) published a report for the 9 months ending 30 September 2021, Sanlam Insurance posted an underwriting loss of Shs 188.77 million
Net claims rose stood at Shs 142,09 million, its market share stood at 2 percent while claims ratio stood at 92 percent.
In 2020, the firm reported an after-tax loss of Sh78 million representing a decline from the prior-year after-tax profit of Sh114million.
The insurance firm becomes the third one issuing a profit warning after Kakuzi and Limuru Tea which both projected 25 percent decline.