BIHL post solid profit growth
Keikantse Lesemela | Tuesday September 2, 2014 11:40
This was largely due to the strong performance by its two flagship insurance and asset management arms. Despite the difficult domestic and global economic environment, both Botswana life Insurance Limited (BLIL) and BIFM Holdings each recorded a 30 percent surge in operating profit.
Profit after tax for the group was however flat at P238 million. In the period, the group’s net premium income grew by 15 percent to P997 million and the value of the new business increased by 84 percent to P72 million while the profit attributable to equity holders remained flat at P234, 6 million compared to the same period last year.
Commenting on the published financial results, Group chief executive, Gaffer Hassam said the local economy performance improvement have steered the groups new business volumes with a growth of 15 percent in premium income over the first half of 2013.
“The annuity line which contributes substantially to our single premium income posted a solid recovery which spearheaded the growth in total net premium Income from P845 million in 2013 to P972 million in 2014,” he said.
In the life insurance, the operating profit grew by 30 percent to P161.7 million due to good operational earnings from all the business lines. “The asset management results has been positively affected by the growth in assets under management due to the good investment returns and client’s net contributions during the year,” he said.
Hassam said the short-term insurance results have been adversely affected by increased claims in the Legal Guard portfolio as well as the ongoing struggle to achieve profitability in the general lines business.
However, the investment income which comprises dividend income and interest income decreased by 55 percent due to the prevailing low interest rate environment. Investment surpluses significantly reduced due to market volatilities.
In the asset management operations its subsidy, BIFM Holdings’ reflected a solid performance in a challenging market and operating environment. The assets under management increased by three percent to P27, 9 billion. Hassam also noted that the global growth remains fragile with the industrial production in the US and Euro-zone slowed down in the first half of 2014. “There has been strong performance from both BIFM and the Zambia business. Year on year operating profit grew by 30 percent, while profit before tax and minorities is three percent lower than prior year,” he said.
He said the good performance is on the back of a strong asset under management position mainly due to market growth and to a lesser extent net fund inflows. “Additionally we have seen positive contribution from our various investment property companies and the total assets under management including Zambia currently stand at P27.9 billion,” he said.
The Unit Trust business, launched last year, continues to experience slow growth.