Britam Holdings Posts 4.2 Billion Kenya Shillings Pre-tax Profits

Britam Holdings, renowned diversified financial services group has post profit returns of 4.2 Billion Kenya shillings pre-tax in 2016 compared to a loss of 1.2 Billion Kenya shillings pre-tax in 2015.

Disposal and revaluation of strategic of strategic investments in equities have been seen as the main contributor to other comprehensive income in both the year 2015 and 2016 which resulted to losses.

Last year the assets increased by 8 percent to 83.6 billion Kenya shillings from 77.6 billion Kenya shillings in 2015. Total comprehensive income grew to 784.7 million Kenya shillings compared to a loss of 3.2 billion Kenya shillings in 2015.

Britam’s life business registered a sustained growth in 2016 with a gross earned premium by 19 percent to 8.8 billion Kenya shillings compared to 7.4 billion Kenya shillings in 2015. This saw the ordinary life premiums increase by 20 percent while the pension increased by 94 percent by sales from the existing network of over 3,800 financial advisors.

Non-life business gross earned premiums declined by 6 percent from 12.2 billion Kenya shillings in 2015 to 11.5 billion Kenya shillings in 2016 as  a result of the Group adopting a more stringent credit policy to mitigate the risk of non-collection of premiums and the adoption of claims handling expenses reserves not previously included. As a result of these changes, the profit arising from this business segment increased to 1.0 billion Kenya shillings from a loss of 92.6 million Kenya shillings in 2015

Net insurance benefits declined by 53 percent. To ensure compliance with requirements of the Insurance Act as amended by the Finance Act 2015 and as required by the Insurance Regulatory Authority (IRA), the Group adopted the Gross Premium Valuation (GPV) methodology which is a change from the previously applied Net Premium Valuation (NPV). This change resulted in a reduction in the net insurance benefits and claims by 5.2 billion Kenya shillings.

Fund management fees from the Asset Management business grew by 29 percent to 929.2 million Kenya shillings compared to 718.5 million Kenya shillings in 2015. The increase is attributable to growth in Assets under Management (AUM) by 20 percent to 108.9 billion Kenya from 90.5 billion Kenya shillings in 2015.

 Speaking during the release of the group’s full year financial results for 2016, Britam Group Managing Director Dr. Benson Wairegi said that the Group had unveiled a new strategy that will help propel the company to the next phase of growth.

 Dubbed “Go for Gold”, the new 2016-2020 strategy is anchored on five strategic pillars of enabling transformation, operational excellence, customer service, Innovation, and Profitable growth.

“The new strategy will be a key platform to deliver the organisation’s next wave of growth, to deliver profitable growth to shareholders,” Dr Wairegi said.

 In light of the good performance, shareholders will earn 581.5 million Kenya shillings in dividends after the board of directors recommended a final payment divided of 30 cents per share.

Related: Victoria Commercial Bank Profit After Tax drops by 17pc

Written by Amina Martha.