Despite the harsh economic realities of 2010, Botswana Life (BLIL) said it managed to make over half a billion Pula payout in claims to policyholders.
The CEO of the insurance outfit, Catherine Lesetedi ÔÇô Letegele, said during the year, household incomes remained under pressure, which negatively affected the company’s ability to grow the individual life book.
“Nonetheless, we at Botswana Life are quite pleased that with the support of our corporate and retail clients, 2010 was yet another successful year, Lesetedi ÔÇô Letegele said.
BLIL, which is a subsidiary of the listed giant Botswana Insurance Holdings Limited (BIHL), paid out P690 million in claims and benefits.
The payout was from the background of a 27 percent growth in revenues from P1.2 billion to P1.6 billion.
The Chief Executive Officer said she hoped the payment will not only demonstrate her company’s financial strength, but also the commitment to a ‘promise that we make to all our policyholders’.
“We hope it will give you, our clients, the confidence that you can continue to trust us with your savings and placement of your group risk covers and look forward to your continued custom in this regard,” she told a Botswana Life CEO’s Corporate Cocktail on Thursday night.
Botswana Life is the country’s largest life insurer with a market share of over 80 percent, but it was also hit by policy cancellations as consumer spending shrunk at the height of the recession.
Like all market participants, the CEO alluded to the fact that on the corporate front, they faced aggressive competitor pricing as clients looked elsewhere for what they deemed cheap prices ‘even if it meant not doing business with a reputable and premier life insurance company like ours’.
Botswana Life also faces competition from new entrant, Absa Life, which is a subsidiary of Barclays Capital and which plans to enter the African markets that will see the company using Botswana as a springboard.
Its products roll-out that started immediately were credit life protection, funeral and group risk schemes and it has indicated that it will soon bring in some more products into the Botswana market that will position it against its peers.
Meanwhile, Lesetedi ÔÇô Letegele praised the annual cocktail which she said has been growing in stature as it continues to attract important stakeholders from all sectors of the economy.
She said the event presents an opportunity for the start of an on-going dialogue between the Retirements and Life Insurance industry and the Ministry of Finance & Development Planning.
She also expects the multibillion Pula retirement and insurance funds to help in the economic diversification. Already, its sister company Bifm is involved in Public, Private Partnership (PPP) projects in the country including the Ombudsman office and the new SADC headquarters.
“Infrastructure bonds are some of the possible instruments that can be added to the menu for investors,” she suggested.
“It has often been argued that the cost of borrowing internally is high, relative to external sources of funding, but let us note that the days of cheap finance from the developed world may well be over.”