Wednesday, May 22, 2024

BIHL retains market share, focuses on capital management

Despite the arrival of new players in the insurance industry, including BramerLife, the country’s largest insurer by market value, Botswana Insurance Holdings Limited (BIHL) posted good half year unaudited results for the six months ended June 2014.
BramerLife is co-owned and led by former BIHL Chief Executive, Regina Vaka.

As a result of the significant improvement compared to the prior year, the Botswana Stock Exchange (BSE) quoted Blue Chip Company has retained their markets share in the domestic insurance industry according to Group Chief Executive Officer, Gaffar Hassam.

Hassam says consistent with the real growth in Botswana’s Gross Domestic Product (GDP), BIHL has been experiencing strong in new business volumes on all lines with a reported growth of 15 percent in premium income posted over the same period last year.
BIHL’s financial statement released this week shows 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.
However Hassam said that 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.?┬á“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.   ?On the short term insurance business, BIHL has focused on the Legal Guard part of the business to reinvigorate the product. To this end, a major effort was initiated to increase sales, improve service delivery and enhance internal efficiencies in a bid to reaffirm Legal Guard as the market leaders in legal assistance cover. ?On Thursday Hassam 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 the company has since received all the required regulatory approvals.


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