Botswana Insurance Holding Limited (BIHL), the country’s legion of both life and property insurance, is to blame the global economic turmoil on Tuesday morning for its sluggish performance during its first six months of the year when it appears on stage for profit parade.
BIHL will appear before the investment analysts and journalists on TuesdayÔÇömarking the second hectic day of the week ÔÇô since the listed financial sector companies come forward to update the market on their half year and full year performances.
“The global economic environment in the first half of the year of 2009 continued to be characterized by uncertainty and volatility in global capital markets,” the markets will be told in an update, but, it is expected to report some recovery in the second half of the year in line with the performance with some developed market.
BIHL is the parent company to Botswana LifeÔÇöthe country’s oldest life assurance company ÔÇô and Botswana Insurance Fund Management (Bifm), the biggest fund management outfit in the country with assets over P 14 billion.
“The local economy has been hit by the collapse in the diamond exports and experienced a technical recession due to the closure of mines and the resulting fall in diamond production.
Debswana Diamond Mining Company suspended operations at its mine during the first quarter of the year in an attempt to minimize the effects of a full blown global economic contraction.
At the same time, Diamond Trading Company Botswana also suspended trading as sightholders showed little interest in the goods largely because they were mired in some credit crunch.
The move led to a situation where government revenue collapsed by 20 percent of the GDP prompting, debates about the long term economic future of the country and government’s commitment towards the diversification of the economy.
“Revenue from diamonds comprises of 40 percent of government revenue and hence the government budget has been under pressure. Nevertheless, the recent trade data suggest that diamond trading are improving along with the world economy,” BIHL said in a statement.
BIHL’s biggest investment arm, Bifm has been working on an Afro-centric investment strategy since last year when the global recession started to spread across the world in the last quarter of the year.
The move prompted the grey-hair fund manager to look into countries like Kenya , Namibia and Zambia in a bid to grow shareholders’ value.
On the other hand, the life assurance division, Botswana Life resisted the shocks of the global economic crunch as premium income from new businesses jumped up by 51 percent to P 147.3 million while net insurance income increased by 32 percent to P 622. 4 million.
“As a result of our client centric approach, in particular listening to our clients needs, we have added benefits to our popular product, Mmoloki, as well as enhanced other products with additional benefits,” the company said.
Some of the moves include the rolling out of a bancassurance product with Barclays bank called Motshegetsi.