Britam's interim pre-tax profit hits Kshs 2.38 billion - up by 193% on previous year
Integrated financial services firm, Britam, has today announced a profit before tax of Kshs 2.38 billion for the half year period ending 30 June 2023. The profit almost triples the Kshs 812 million recorded in the same six-month period ended 30 June 2022
Key highlights: -
• A sustained growth in revenue with gross earned premiums and fund management fees up 31 percent to Kshs 20.7 billion.
• Strong growth in interest, dividend and rent income which was up 28 percent to Kshs 7.1 billion.
• Regional general insurance businesses contribution of 23 percent to the Group’s gross earned revenues.
• As at 30 June 2023, the total shareholders' equity was up 10% to KShs 23.5 billion, reflecting the improved results.
The encouraging performance has been driven by growth in top-line revenue, as well as improved investment income that continues to cushion the business from fair-value losses, resulting in a significant growth in profitability.
The total gross earned premium and management fees in the six-month period was up 31 percent to Kshs 20.7 billion compared to the Kshs 15.8 billion for the same six-month period in 2022. The International general insurance businesses continue to contribute to Britam’s revenues and profitability. The businesses generated 23 percent of Britam’s total gross earned premiums and remain a key pillar of the Group’s geographical diversification strategy.
The improved insurance underwriting performance was driven mainly by increased motor business and continued strong performance from the life insurance business. In line with new insurance accounting standard IFRS 17, the insurance results now include a portion of the unearned profit (contractual service margin) from the long-term business that are now reflected in the profit and loss account.
The growth in the investment portfolio was driven by growth in revenues and the ongoing re-allocation of the portfolio with the objective of growing and stabilizing yields. Investment income grew by 28 percent to Kshs 7.1 billion compared to KShs 5.5 billion recorded in the same period of 2022.
In the third year of the implementation of its five-year strategic plan, Britam continued to focus on the improvement in operational efficiency. The Group managed to keep the underlying operating expenses ratio for the six-month period at 30 percent which was similar to the same period in 2022.
Commenting on the Group’s financial performance, Britam’s Group MD & CEO Mr. Tom Gitogo said:
“We are confident of the growth and performance trend that Britam has achieved, supported by its subsidiaries in Kenya and in the region. The business continues to grow its revenues while operating costs grow at a lower rate than the topline growth.”
Mr. Gitogo added “Continued focus on customer-centric transformation has seen higher customer satisfaction, growth in customer numbers and uptake of solutions, especially through our emerging market consumers, and partnerships and digital channels.
Despite the challenging macroeconomic environment which has witnessed yields shifting upwards, for the period under review, Britam recorded a 25 percent decline in net fair value losses from equities and government securities compared to same period in 2022.
Supported by its strong brand position, Britam remains focused on seizing the growth opportunities across its footprint, taking advantage of the low penetration of insurance products, catalyzed by ever-increasing financial literacy.
With slightly over two years remaining in the 2021-2025 strategic plan, the positive trajectory in Britam’s operational and financial performance makes the company optimistic about fully realizing the strategic goals that were set. This is expected to unlock the Group’s potential and deliver value to its shareholders and all its key stakeholders.
The Group remains fundamentally strong. The ongoing execution of the Group's EPIC2 #OneBritam Transformational Strategy is expected to improve the company's financial performance and business growth.
The Board of Directors did not recommend the payment of an interim dividend for the half year period ended 30 June 2023.