Britam swings back to profits

Regional based insurer Britam has swung back to profitability having posted net earnings of Ksh.376.3 million across six months to June.

This to reverse a loss of Ksh.1.6 billion at the same stage last year, largely as a factor of greater income booked in the period.

Britam’s total income rose by a notable 52.7 per cent to Ksh.19.7 billion as net earned premiums in the period topped Ksh.12 billion from Ksh.11.7 billion in June 2020.

At the same time, the underwriter has recorded higher investment income at Ksh.4.9 billion from Ksh.3.6 billion previously, alongside Ksh.1.4 billion in fair value gains in the half year cycle.

The greater operating income for the Group has served to offset a 25.2 per cent surge in overall expenses to Ksh.18.9 billion.

Under the expenses, net insurance claims payable to policyholders surged to Ksh.9.4 billion from Ksh.8.2 billion while operating and other expenses shot up to Ksh.4.9 billion from Ksh.3.9 billion previously.

Britam has tied the growth in operating expenses to a one-off item related to its ongoing business restructure while claims and policyholder expenses have soared from policyholders’ financial constrains emanating from the COVID-19 pandemic.

The management of Britam is optimistic of retaining profits for the underwriter supported largely by gains from the Group’s recent transformation and the improving macro-economic environment.

“The Group remains optimistic of sustaining profitability in 2021 on the back of an improving operating environment and gains from our new transformation strategy. In the short term, we will however continue to pursue prudent cost management initiatives and maintain a stable solvency position,” said Britam’s Group Managing Director Tavaziva Madzinga.

Britam’s asset base has stretched to Ksh.146.9 billion to include Ksh.12.3 billion and Ksh.124.8 billion in insurance and investment assets respectively.

The Group’s board of directors have not recommended the payment of an interim dividend for the period.