Botswana Life on track for healthy profits

MBONGENI MGUNI
Staff Writer | Friday July 30, 2010 00:00

For the financial year ended December 2009, Botswana Life Insurance Limited (BLIL) recorded a record-breaking net premium income increase to the P1.3 billion, largely avoiding aside the ill winds of the global recession.

BLIL, the country's largest insurance company with about 300, 000 clients, rode the crest of the wave created by uninsured clients' need to obtain cover against the various risks exposed by the recession. In addition, the recession saw clients migrate to larger and more established insurance companies as a way of minimising risk.

On Wednesday, BLIL officials revealed that net policy benefits paid out in the first half of 2010 were likely to exceed P300, 000. This is compared to the P524, 000 paid out by the insurance company in policy benefits for the financial year ended December 2009.

While recorded in the books as an expense, the quantum of policy benefits paid out is an indicator of the volume of business retained and secured by the insurance company. Between December 2006 and 2009, the sum of net policy benefits paid out are positively related to net premium income.

At the estimated value of P300, 000, Botswana Life is expected to post solid premium income and overall profitability, particularly given the warming domestic economic environment.

BLIL Head of Sales and Customer Service, Thomas Masifi, said the insurance company was growing from strength to strength.

'In the last financial year, we paid out P500, 000 in policy benefits and we are about to release our half-year results where we have paid out about P300, 000 in terms of benefits,' he said at the Business Continuity Seminar on Wednesday.

'We hold the record for size of claim when we paid out over P2 million to a lawyer. We paid because that person was our client, not because the person was a lawyer.'

Masifi noted that BLIL grew from a single client at establishment in 1975 to close to 300, 000 files under management currently. This portfolio of policies is valued at approximately P1.3 billion, according to Botswana Life's December 2009 results.

'In the past four years, we have been recording a growth rate of more than 20 percent year-on-year, which shows that we are interested in clients' needs and they see the benefit of being insured with us,' said Masifi.

BIHL, which contributed approximately 75 percent of the parent group's earnings in 2009, is the fifth most capitalised counter on the Botswana Stock Exchange.