NAIROBI, Kenya, Aug 21 – Sanlam Kenya has reported a steep drop in profitability for the first half of 2025, weighed down by rising insurance service expenses and weak underwriting performance, despite strong investment returns.
The Nairobi Securities Exchange-listed insurer posted a profit after tax of Sh30.9 million, an 89 per cent decline from Sh282.2 million in the same period of 2024.
Insurance revenue grew 6 per cent to Sh3.7 billion, supported by higher premiums across both life and general insurance.
However, insurance service expenses rose to Sh3.3 billion from Sh3.16 billion, while net reinsurance costs increased to Sh418.2 million. This pushed the group’s insurance service result into a loss of Sh10.1 million, compared to a Sh86.2 million profit a year earlier.
On the positive side, Sanlam Kenya’s investment income provided a buffer, with returns climbing 34 per cent to Sh3.1 billion. The growth was driven by stronger yields in fixed income and equities, alongside a jump in interest income to Sh1.47 billion from Sh1.11 billion.
Still, net finance expenses on insurance contracts nearly doubled to Sh2.93 billion, eroding earnings further. Operating expenses also rose sharply to Sh63.9 million from Sh20.9 million in the first half of 2024.
Earnings per share dropped to Sh0.10, from Sh1.88 last year.
Despite the profit squeeze, the insurer’s balance sheet showed resilience, with total assets expanding 5.6 percent to Sh41.3 billion.
The results highlight the challenges facing insurers in balancing underwriting profitability against rising claims and financing costs, even as investment gains remain robust.
Sanlam Kenya joins a growing list of underwriters grappling with margin pressures in 2025.
