SUBDUED

Britam records loss despite revenue growth on covid effects

In Summary
  • Revenue growth was mainly supported by the continued growth of the international insurance business revenue.
  • The loss was propelled by poor stock earnings and depressed property market
Britam Group managing director Benson Wairegi when he announced the firms's 2018 financial results in Nairobi.
Britam Group managing director Benson Wairegi when he announced the firms's 2018 financial results in Nairobi.

Diversified financial group Britam Holdings reported a nine per cent growth in gross earned revenue despite its bottom line shrinking on poor stock performance and stalled yield in the property market due to Covid-19.

Financial results for six months to June 30 released Thursday shows the insurer’s revenue grew to of Sh13.8 billion up from Sh12.6 billion the same period last year.

This growth was mainly supported by the continued growth of the international insurance business revenue.

Britam operates in six countries outside Kenya. The International insurance division contributed 23 per cent of the gross earned premium and a profit of Sh575 million.  

Even so, the lender’s net earnings plunged to a loss of Sh1.6 billion compared to a profit of Sh1.7 billion in the corresponding half last year.

The unfavorable results reflect the significant negative impact of Covid-19 on the operating environment particularly on investments in listed equities and property.

Cumulatively, its gross loss hit Sh2.3 billion compared to a profit before tax of Shs 2.4 billion in the same period last year.

The Group’s operating costs declined by six per cent on the back of a nine per cent revenue growth. This drop is attributed to prudent cost management initiatives in the period under review.

The Life Assurance business continues to underwrite profitable new business with the embedded value closing at Sh17 billion, with an annualized return of nine percent.

The company’s total assets increased to Sh128.5 billion, representing a growth of three per cent from December 31, 2019.

Britam Group MD Benson Wairegi said the adverse impact on the half-year performance is largely attributable to the fair value losses of Shs 3.1 billion following the depressing performance of the stock market as investor preferences shifted to fixed income securities and property revaluation losses of Shs 929 million due to the depressed property market.

“The Group’s fundamentals remain strong and we are on track in the execution of our strategy. Coupled with an improved operating environment, the performance outlook is positive,’’ Wairegi said.