Leading insurance company, Botswana Life Insurance Limited (BLIL), says the Khumo 2016 investment policy has performed well, delivering a healthy annual return of 7.9% in 2015, outperforming other investment options. This despite persisting challenging economic conditions, particularly during the 2007-2008 global economic downturn, which affected financial markets worldwide and led to lower than expected returns.
“We are satisfied with the performance of Khumo 2016. Although Botswana
Life was not immune to the market volatility, I am satisfied that we weathered the storm and continued to meet our obligations to our valued customers through paying out claims on time. Investments are by nature unpredictable due to the volatility of market forces which are beyond our control. This is why returns are only ever projected and never guaranteed.” stated Chief Executive Officer Bilkiss Moorad.
A comparative analysis illustrates that post the financial crisis, Khumo 2016 provided superior returns to the rolling 10 year returns of financial markets. Also that the projected annual net returns of 12% at inception were in line with the performance of financial markets at the time.
“Empirical data shows us that prior to the global crisis, the average rolling 10 year returns were 12.5%, which demonstrates that the projected net return of 12% per annum for Khumo 2016 was achievable given the prevailing economic conditions and performance of financial markets at the time the product was introduced. Following the global financial crisis however, 10 year rolling returns have been 5.13%, which is lower than the historic average (10.43%) and lower than Khumo annual net returns of 7.4%.” said Moorad.
“As an industry leader with a 41-year track record of creating wealth for Batswana through the provision of financial solutions, we value the strong relationships we have established with our customers, and recognize their loyalty as a valuable contribution to the company’s financial growth. We operate in the business of trust, where
The insurance company which has paid out over P6 billion in claims between 2010 and 2015 and contributed over P16 million to community development since 2008 through various CSI projects, remains optimistic about the performance of its products.
“In the broader context, the policies which mature this year performed well with an average annual net return of 7.4% between 2001 and 2014. In 2015
Khumo outperformed banks (2.6%) and government bonds (4.07%) by giving an annual return of 7.9%, still giving policy-holders a solid return on their investment in this post financial crisis era.” said Boa Chombah, Head of Public Relations at BLIL.
Chombah did acknowledge that there has been a gap in proactive communication with policy-holders regarding the performance of their investments. “Although our clients continue to have unrestricted access to information about the performance of their policies through our Contact Center and any of our 12 branches across the country, we acknowledge that we could have done more to keep them informed”.
She added that BLIL is taking steps to strengthen its communication with clients through sms notifications for arrears & policy maturities and will soon start issuing periodical statements to investment and retirement annuity clients.