Despite uncertainties in the global markets, which are expected to continue affecting the results of Botswana Insurance Holdings Limited (BIHL), the Botswana Stock Exchange (BSE) quoted insurer says it will continue to focus on its key twin strategies of growth and profitability.
When announcing its latest financial statements last week, BIHL said improvement in performance of the local economy during the first half of 2014, driven by the mining sector, resulted in strong new business volumes on all lines with a growth of 15 percent in premium income over the first half of 2013.
BIHL’s financial statement show that its annuity line, which contributes substantially to the single premium income, posted a solid recovery and spearheaded growth in total net premium income from P845 million in H1:2013 to P972 million in H1:2014. The Group’s operating profit grew 30 percent year on year to P 161.7 million from P124.6 million reported in June 2013. All business lines contributed positively to the performance. However, BIHL CEO Gaffar Hassam said the group suffered under achievement on its investment linked individual life business as a result of reduced investment returns compared to the prior year. Unit costs were contained within budget at 3 percent lower than prior year due to improved new business volumes and disciplined expenditure by management.
“The Life Rewards card continued to serve our clients well by availing to them a convenient way to receive benefits. This was evidenced by increased uptake as the card exceeded the 17,000 mark in terms of issued cards. Policyholder benefit disbursements through the card also exceeded P90 million,” read the BIHL financial statement.
Under the Group’s asset management business,┬áBIFM Holdings’ first half year results reflect a strong performance from both BIFM and the Zambia business. Year on year operating profit grew by 30 percent while profit before tax and minorities were 3 percent lower than prior year. The good performance, on the back of a strong asset under management position, was said to be mainly due to market growth and to a lesser extent net fund inflows.┬á┬áLed by Chief Executive Officer Tiny Kgatlwane, BIFM’s total assets under management, including Zambia, currently stands at P27.9 billion and the Unit Trust business, launched last year, continues to experience slow growth.
On the short term insurance business,┬áBIHL has focused on the Legal Guard part of the business to reinvigorate the product.┬áTo this end, a major effort was initiated to increase sales, improve service delivery and┬áenhance internal efficiencies in a bid to reaffirm Legal Guard as the market leaders in legal assistance┬ácover. The optimization of Legal Guard is reportedly showing positive results and it will continue until the remainder of 2014.
The Group admitted that the general lines business kept on making losses beyond their level of tolerance. As a result, management entered into negotiations with Botswana Insurance Company Limited (BIC) to sell off the general lines book to BIC and they have now received all the required regulatory approvals.