HIT

Sanlam sinks into Sh78 million after-tax loss

This is from the previous year's after-tax profit of Sh114million

In Summary

•Effects of the Covid-19 pandemic on the local economy and foreign exchange rates adversely impacted the Group’s net assets valuation, Chairman John Simba said.

•The challenging business environment eroded gains made in the growth of gross premium income, which increased by 24.4 per cent to Sh8.69 billion.

Sanlam Kenya Group CEO Patrick Tumbo. Image:Courtesy
Sanlam Kenya Group CEO Patrick Tumbo. Image:Courtesy

Sanlam Kenya has reported a Sh78 million after-tax loss for the year 2020, blamed on increased claims and lower investment returns in the wake of the Covid-19 pandemic.

This is from a Sh114 million net profit the previous year.

The Nairobi Securities Exchange (NSE) listed insurance and investment firm's pre-tax profit shrunk 92 per cent to Sh43 million from the Sh550 million posted  in 2019.

Group Chairman John Simba yesterday said the effects of the Covid-19 pandemic on the local economy and foreign exchange rates adversely impacted the Group’s net assets valuation.

The challenging business environment eroded gains made in the growth of gross premium income, which increased by 24.4 per cent to Sh8.69 billion up from Sh6.99 billion posted the previous year, due to growth in both the long and short-term insurance businesses.

The firm’s total income had also accelerated to Sh9.42 billion up from Sh8.89 billion recorded in 2019, representing a six per cent growth.

At the business operating level, the firm’s insurance subsidiaries, Sanlam Life and Sanlam General Insurance , generated Sh 499 million and Sh138 million in after-tax profits.

Sanlam Life’s Gross written premium grew to Sh5.21 billion up from Sh4.38 billion posted the previous year.

The firm’s investment income also maintained a positive trend growing to Sh2.33 billion from Sh2.20 billion in the prior year.

The life insurance firm’s investments continued to hold steady at Sh26.3 billion, up from Sh24.7 billion posted the previous year, and significantly buoyed by more than Sh20.48billion holding of government securities at the close of the trading year.

Sanlam General Insurance’s Gross written premium grew to Sh4.06 billion, up from Sh2.85 billion.

The firm’s total income grew to Sh2.59 billion, up from Sh2billion posted in 2019.

Group CEO,  Patrick Tumbo said management focused on securing the employees’ health and jobs, cost saving, new product development, innovation and delivery of sales and services online.

As part of the business growth strategy, Sanlam Kenya’s Life insurance subsidiary, in conjunction with Minet Kenya recently unveiled an innovative post-retirement insurance plan branded RetireMed.

This product is designed to assist Kenyans save for their medical expenses in retirement.

Further efforts to develop and deliver to the market new products,Tumbo said, are ongoing, backed by enhanced digitisation of the firm’s business processes to improve customer experience and satisfaction.

“The business retains a positive outlook for the year 2021 with all our operating ratios still robust. We remain committed to creating and protecting the wealth of our clients and other stakeholders through innovative product offerings and employing the most efficient processes,” Tumbo said.

Looking ahead, Simba reiterated that the Sanlam Kenya Board of Directors, are maintaining a positive outlook on the business as management continues to focus on the execution of the Group’s strategic initiatives to achieve performance goals.