Sanlam bounces back with Ksh.114 million full year profit

Insurer Sanlam has quickly turned round its fortunes by posting a Ksh.114.4 million profit for the 2019 financial year to return from a Ksh.2 billion loss in 2018.

The rebound has been supported largely by increased underwriting and higher investment income with the group’s insurance subsidiaries anchoring the turnaround.

Gross premium income soared by 11.1 per cent to Ksh.7 billion with the insurer’s short-term underwriting business returning a 30 per cent growth in the period.

The total income grew by 50.8 per cent to Ksh.8.9 billion with investment income rising to Ksh.2.4 billion as 2018 fair value losses turned a profit to return Ksh.422 million with the company further sieving out its impairment in financial assets to a Ksh.2.6 million positive gain.

Sanlam further managed costs as net claims and policy holder benefits fell to Ksh.4.8 billion from Ksh.5.1 billion in 2018.

Financing however grew considerably to Ksh.457.6 million from Ksh.191.9 million to see total expenses surge marginally to Ksh.8.3 billion.

Last year, Sanlam booked its first loss in over a decade as investment decision led to grand impairment losses with the insurer writing off a combined Ksh.1.1 billion in Athi River Mining, Real People Kenya and Kaluworks.

Sanlam Group CEO Patrick Tumbo has backed the review in investment strategy to continue the resurgence flanked by a better 2020 investments return outlook.

“We have been pursuing our earlier announced strategy that focused on cost containment and aggressively growing our revenue base in the short and medium term,” he said.

During the year, Sanlam undertook a review of its staff base to send home 19 senior ranking employees after the issuance of a voluntary early retirement program (VER) with the aim of trimming out at least Ksh.200 million in staff benefits.

The firm did not however immediately disclose its incurred layoff costs.

The board of Sanlam has held back against recommending a dividend pay-out to shareholders with the company retaining higher earnings for the period.