Britam sinks back to Ksh.9.1B full year loss


Britam Centre
Britam Centre

In Summary

  • The notable loss which reverses a Ksh.4.6 billion in 2019 is largely attributable to losses incurred in the underwriter's investment portfolio.
  • The firm has for instance booked fair value losses of Ksh.2.3 billion from sliding stock market valuations and Ksh.2 billion from property impairments.
  • Britam’s biggest Achilles heel has however come from a Ksh.5.2 billion provision for investment losses in Wealth Management Fund LLP, a fund manager under the wings of Britam Asset Managers- a subsidiary of Britam Holdings.

Regional based insurer Britam Holdings has sunk back into loss making with earnings for the year ended December 2020 slumping to negative Ksh.9.1 billion.

The notable loss which reverses a Ksh.4.6 billion in 2019 is largely attributable to losses incurred in the underwriter’s investment portfolio.

The firm has for instance booked fair value losses of Ksh.2.3 billion from sliding stock market valuations and Ksh.2 billion from property impairments.

A Ksh.823 million share of the annual loss is for instance from a reduction in the company’s investment in lender Housing Finance.

Britam’s biggest Achilles heel has however come from a Ksh.5.2 billion provision for investment losses in Wealth Management Fund LLP, a fund manager under the wings of Britam Asset Managers- a subsidiary of Britam Holdings.

“The Holding Company is committed to support the fund to fulfill its obligations as they fall due, through management oversight of the fund’s operations and the agreed recovery plan,” Britam stated.

Britam’s core underwriting business nevertheless remained unscratched in 2020 with net earned premiums in the year holding steady at Ksh.23.1 billion on the backdrop of the COVID-19 pandemic crisis.

The company’s total expenses covering largely claims and benefits paid out to clients meanwhile rose by 22.6 per cent to Ksh.39 billion.

The firm’s exposure to investments in properties and stocks has continued to see its performance swing in alignment to the performance of the assets.

A general slump in macro-economic conditions has for instance left Britam staring at losses while the reverse has seen the company book significant earnings through over the last few years.

The Group has nevertheless marked resilience in both cash generation and asset growth.

During the year for instance, Britam generated Ksh.7.6 billion in cash inflows while assets grew by 9.4 per cent to Ksh.137 billion while assets under management (AUM) closed the year at Ksh.250 billion.

Britam has backed its turnaround on a new 2021-25 year strategy which is premised on a new organization structure and digitization.

The company’s shareholders will miss out on a dividend following the booking of a loss, reversing a 25 cents per share payout last year.

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