The Botswana Insurance Holdings Limited (BIHL) recorded a P288.8 million profit after tax in its financial results for the half year ended 30 June 2015. Announcing the results at Avani Gaborone Hotel & Resorts last week, the company indicated that good operating results aided by strong positive investment returns mainly coming from offshore markets, as well as improving lapse experience, added to the significant growth in operating profit from P162 million to P188 million in 2015.
The company, which houses the Botswana Insurance Fund Management (BIFM), Legal Guard and Botswana Life, saw its core earning increasing by 27 percent to P215 million, while the value of new business, which represents the present value of future profits from new business premiums written during the half year, increased by 9 percent to P78.9 million.
It said premium income grew by 33 percent over the first of half 2014 from P972 million to P1.29 billion with most income lines, contributing positively, further indicating that annuity new business grew by 68 percent year on year which underpinned a 24 percent growth on total new business written.
“Management has rolled out the new five year strategy which is focused on steering the company towards sustained growth. With the implementation of the new strategy now under way, management firmly believes that the company will continue delivering real sustainable growth on all its key performance indicators despite growing competition and muted economic growth. As part of this journey, the Botswana Life brand was reinvigorated in line with the new strategy,” the company has said.
On its asset management business, the Gaffar Hassam-led business has noted that “BIFM Holdings’ first half of the year results reflect resilient performance in a challenging market and operating environment. Year on year operating profit declined by 30 percent, but still remained profitable with a profit of P17 million, while profit before tax and minorities is 27 percent lower than prior year.”
It said the adverse performance is on the back of the reduction of assets under management. “Total assets under management currently stand at P20.5 billion. The business has concluded realignment processes that will ensure that it is optimally structured to keep delivering superior client service; this resulted in once off restructuring expenditure that also contributed to the reduced profit,” BIHL said.
Regarding its short term insurance business, it said following the sale of its general insurance business last year, BIHL Insurance Company has refocused on its remaining operating division, Legal Guard. “2015 saw the introduction of a new three year strategy as a road map for guiding the business through recovery, consolidation, and onwards to sustainable profitability. The Legal Guard brand identity has also been refreshed to symbolize the rejuvenation of the business. As part of the recovery phase of the strategy, the first half of the year has seen Legal Guard continuing its efforts to reinvigorate the business by increasing sales, improving the customer service experience and enhancing operational efficiencies,” it said.
BIHL, which has total assets worth over P13 billion, noted that “these efforts have resulted in a marked improvement in financial performance as illustrated by a 22 percent increase in revenue as compared to the first half of 2014. The remainder of 2015 will be dedicated to a continued focus on the recovery phase of the business strategy as well as commencement of activities to exploit a dominant market position and related competitive advantages.”