BY KABELO SEITSHIRO
The Group Chief Executive Officer of Botswana Insurance Holdings Limited (BIHL) Catherine Lesetedi- has acknowledged that aggressive competitor pricing on group schemes as well as poor claims experience on group schemes over the past year have had impact on the company’s financial performance.
Apart from intensified domestic competition, the insurance group has also listed enforcement of Anti-Money Laundering and Know Your Customer (AML/KYC) requirements amongst the developments that have negatively affected some of its subsidiaries.
The group however intends to lean on its twin strategy of growth and profitability that is part of the five year strategy first launched in 2016.
“Any business, though driven by operational efficiency and its competitiveness in the markets, is still significantly affected by the economic environment in which it operates, both globally and locally,” said Lesetedi.
She further stated that the Group remains well positioned in terms of capital management and solvency adding that they continue to focus on growth and profitability. She said however, uncertainty in the global markets is expected to continue to affect the results, and that they continue delivering on their strategy.
“Funeral Services Group, Botswana Insurance Company Limited and NICO reported satisfactory results compared to last year,” she said.
The group’s financial highlights for the year ended 31 December 2018, Net insurance premium income increased by 1 percent to P 2.35 billion while Embedded value increased by 3 percent to P 4.42 billion from December 2017 at P 4.31 billion. However, Value of new business decreased by 1 percent to P 147 million. BHIL Group’s Operating profit increased by 12 percent to P 375 million.
Botswana Life recorded a stable performance in 2018 despite a challenging economic environment with Net Premium income of P 2.35 billion. During the year, Botswana Life launched the International Investment Plan (BLIIP) for high net worth clientele as part of the affluent client value proposition. The product, a first of its kind in Botswana, is a USD denominated offshore investment plan and is demonstrative of their agility and commitment to leveraging to address customer needs.
The Bifm group, which comprises local and Zambia operations also saw a positive year and continues to make a strong contribution to the Group as their key asset management investment. Lesetedi said while income performance in both Bifm and Zambia showed a year on year increase, the business had to incur some business-critical expenses, resulting in higher costs in 2018. She said this, coupled with an unfavourable Kwacha performance, weighed down the operating profit number. Stated that however, Bifm’s total Assets Under Management (AUM) grew by 3 percent year on year to P27.5 billion. She believes that this demonstrates Bifm’s resilience in a tough operating environment.
Group’s short-term insurance business, Legal Guard has achieved an operating profit of P3.6 million for the year, up from P1.4 million for 2017 and Lesetedi stated that this increase has been achieved as the benefits of initiatives which began in prior years, in a bid to improve the company’s ability to achieve sustainable profitability, now continuing to be realised. She said looking forward, Legal Guard will continue to focus on the implementation of its current strategic plan with emphasis on arresting and reversing the recent trend in top line performance
The company resolved to award a final dividend of 67 thebe per share (gross of tax) and a special dividend of 16 thebe per share (gross of tax).