Wednesday, October 20, 2021

BIHL’s twin strategies bear fruit

Botswana Insurance Holdings Limited (BIHL) seems to be reaping the benefits of its twin strategies of growth and profitability as well as leveraging on existing resources to harness upward trends. The Group has released a strong set of financial results for the full year ended 31 December 2015, including a 31 percent increase in operating profit to P386.1 million. 

BIHL’s core earnings increased by 31 percent to P420 million while profit attributable to equity holders increased by 19 percent to P595 million. Embedded value increased by an impressive 13 percent to P4.3 billion, allowing for dividends worth P281.1 million to be paid during the year. Net premium income increased by 25 percent to P2.5 billion, and the value of new business increased by 15 percent to P170.5 million.

Within the Life business, net premium income grew by 25 percent from P1.95 billion in 2014 to P2.44 billion in 2015, with most income lines contributing positively to the growth. Total New Business written grew by 19 percent, underpinned by a strong single premium income performance. Recurring Premium Income (Net), at P1.015 billion, breached the P1billion mark for the first time in the history of the organisation, which is in line with the company’s strategy of focusing on sustainable growth. Strong operating performance saw a significant growth in operating profit from P317 million to P390 million in 2015, a 23 percent growth year on year.

BIHL out going Group Chief Executive, Gaffar Hassam said the Group’s two most recent investments included 25.1 percent shareholding in Nico Holdings Limited, which was acquired at the end of 2015; as well as acquisition of 50 percent indirect ownership of Botswana Insurance Company (BIC) in January 2016. 

“The investments further diversify the Group’s financial services portfolio, and are anticipated to also provide an enhanced client offering,” said Hassam. 

He said BIHL remains committed to ensuring stability and growth in what continues to be a challenging business environment. The Group’s subsidiary companies have been working tirelessly by implementing various key initiatives in order to ensure sustainability and continue on their strategy to become a broader financial services operation. Botswana Insurance Fund Management (Bifm) attained satisfactory results for the year 2015, remaining buoyant despite a turbulent and challenging market. Operating profit declined by 20 percent decline year on year, primarily due to the decrease in assets under management as a result of a mandate withdrawal in the first half of the year. 

“Consequently, the business embarked on and has concluded its realignment processes,” said Hassam.

He however maintained that Bifm remains a profitable business, posting operating profit before taxation of P31 million for the year (excluding Zambia), with profit margins steadying at 46 percent versus 48 percent in 2014. Total assets under management stabilized at P20.8 billion (including Zambia’s AUM of P3.8 billion). Newly appointed BIHL Group CEO, Catherine Lesetedi-Letegele is of the view that 2015 was devoted to building-on and entrenching initiatives that began in 2014, that included revitalising Bifm. She said as a result of these efforts the financial performance of the business has significantly improved as illustrated by the return of the business to profitability. 

“As a result, the business recorded operating profits of P3.1 million for the year compared to a loss of P25.9 million in 2014. This result is especially pleasing in light of the difficult domestic economic conditions experienced during the past financial year,” said Lesetedi-Letegele.

She further said BIHL will continue to leverage existing capabilities and drive new mergers and acquisitions, which will set a positive outlook for the Group. The Group awarded a final dividend for the year at 67 thebe per share (gross of tax).

 

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