Botswana Insurance Holdings Limited (BIHL), the Botswana Stock Exchange (BSE) listed entity, has reported a marginal rise in profits for the year 2014, the company financials released on Friday shows.
As a result, the group says it intends to focus on defending its market share as it continues to offer clients and customers the highest level of service. The Group board chairman, Batsho Dambe-Groth says following the significant reduction in the assets under management, the business will have to restructure during the current financial year.
“Unit acquisition costs reduced by 13 percent compared to last year due to improved new business volumes. Disciplined expenditure and unit maintenance costs grew 1 percent over prior year in line with operating expenses,” reads the statement.
A close look at Bifm financials shows that it achieved very satisfactory results for the year 2014 as a result of continued growth of assets under management, well supported by positive net client contributions. Currently led by Acting Chief Executive Neo Bogatsu, Bifm’s year on year operating profit, profit before tax and minorities increased by 12 percent respectively. Bifm incurred an adverse fair value adjustment of P15.9 million as a result of the sale of its controlling interest in a Zambian property investment company. The company said this once off event is not expected to reoccur in similar transactions in 2015.
Amongst the group’s three principal business areas, the life insurance segment’s premium income grew by 6 percent over prior year from P1.84 billion to P1.95 billion with all lines contributing to the positive movement. Individual Life New Business Annual Premium Equivalent (APE) grew 16 percent which is an outstanding performance.
Led by Cathrine Lesedi-Letegele, Botswana Life Insurance Limited (BLIL)’s operating profit grew 15 percent year on year to P 317.5 million from P275.7 million. BIHL’s Sure business comprises of two distinct business lines; the general lines that provided conventional short term insurance solutions and Legal Guard, the leading legal expenses cover product in the country.
“As reported at half year, although the company had high hopes for this business since starting in 2012, continued market challenges including strong price competition and slower than anticipated penetration of the commercial lines market resulted in the business taking a view to discontinue offering short term insurance by mid-2014,” reads the statement.