Jubilee diversifies to finance with fund manager licensing


Jubilee diversifies to finance with fund manager licensing
Jubilee Holdings Chairman Nizar Juma adresses a news conference on Tuesday June 25, 2019 PHOTO | CITIZEN DIGITAL

In Summary

  • The underwriter has already begun setting the stage for the commencement of the new investments portfolio having acquired a fund manager’s license from the Capital Markets Authority (CMA) on May 6, 2019.
  • According to Chairman Nizar Juma, the firm expects to provide footing to Group earnings through the new revenue stream whose start date is set for October 1, even as the insurer remains well anchored in its general insurance business.

Kenya’s largest insurer by asset base Jubilee Holdings has set its sights on financial services in what is a move away from its traditional general insurance business.

The underwriter has already begun setting the stage for the commencement of the new investments portfolio having acquired a fund manager’s license from the Capital Markets Authority (CMA) on May 6, 2019.

According to Chairman Nizar Juma, the firm expects to provide footing to Group earnings through the new revenue stream whose start date is set for October 1, even as the insurer remains well anchored in its general insurance business.

“We are in the recruitment stage and are hoping to be operational in the fourth quarter. This is a first for Jubilee, but as a strong financial industry player, we ought to have been here sometime back. It has been a missing item for us,” he said.

The new venture into finance serves to stiffen the competition to an already crowded fund manager investment vehicle, with a lump sum of underwriters already making up an active participation base.

“It’s a natural progression; our competition already has a strong base in asset management. We would feel that we have the capacity to attract plenty of wealth managers from the high-net worth individuals given our strong financial base, experience, prudence and values,” added Jubilee Holdings Regional Chief Executive Officer Julius Kipng’etich.

Jubilee Holdings has continued to exhibit the capacity to diversify into new business avenues, this as the general insurance business continues to be characterized by income draining pitfalls including rising claims, fraud, cost undercutting and impairment to equity investments.

Jubilee has for instance reduced on its investment in quoted shares by half within a period of six years to December 31, 2018 to Ksh. 6.6 billion, while increasing its fixed-income portfolio over the same period to a share of 56 percent represented in investments worth Ksh.55.2 billion.

It is from the risk-based selection of portfolio investments that Jubilee Holdings has consecutively paid out dividends to shareholders since its Nairobi Securities Exchange (NSE) Listing in 1984.

The firm has, in the year running to the close of 2018, paid up a final dividend of Ksh.9.00 to shareholders, a similar rate to 2017 on the back of what has been described as the worst year for insurers in over a decade’s time.

Jubilee Holdings posted a flat profit growth of Ksh.4.2 billion attributed to a notable growth of alternative income and a stranglehold on fair value losses.

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Story By Kepha Muiruri
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