- Its gross profits grew to Sh552 million compared to a loss of Sh57 million for the same period last year.
- Late last year, OMLAC shareholders sold all the shares to UAP Life Assurance Limited (UAPAL) in exchange for shares in UAPAL.
UAP Old Mutual Group has recovered from the loss position to record an after-tax profit of Sh252 million in the first six months of 2021.
The integrated financial services firm reported a Sh305 million loss during the same same period last year.
Gross profits hit Sh552 million compared to a loss of Sh57 million for the January to June period last year.
Excluding the impact of the Old Mutual Life Assurance Company (OMLAC) consolidation, the Group recorded a profit before tax of Sh518 million.
The improved performance was attributed to strong top-line growth and investment income performance on the back of the NSE recovery in the first six months of the year.
UAP Group CEO Arthur Oginga said the performance was delivered on the backdrop of the initial stages of the expected economic recovery as economies work towards recovery while managing the risks of subsequent waves of the Covid-19 pandemic.
"In our core Kenya market, we have seen positive results in the NSE indices and economic data as at H1 2021 which speaks to the initial stages of the recovery,'' Oginga said.
Late last year, OMLAC shareholders sold all the shares to UAP Life Assurance Limited (UAPAL) in exchange for shares in UAPAL.
This resulted in UAP Holdings Plc continuing to exercise control, although its shareholding in UAPAL reduced from 100 per cent to 55.7per cent with the remaining 44.3per cent being held by Old Mutual Holdings Limited.
''The consolidation of the two life companies is part of our corporate structure simplification and the UAPH results as of H1 2021 is the first set of consolidated results that include OMLAC,'' Oginga said.
Gross written premiums were up 33 per cent driven by both the short and long-term insurance businesses.
The long-term insurance business experienced a recovery compared to the previous year driven by strong corporate sales while the short-term insurance business has sustained the strong growth recorded in 2020.
Net earned premiums were up 17 per cent over the same period in 2020 in line with gross earned premiums which were up 22per cent.
Excluding the results of OMLAC, on a like-for-like basis, gross written premiums were up 26per cent, gross earned premiums were up 14 per cent and net earned premiums were up eight per cent.
Investment income was up 121 per cent driven by a recovery in the Kenya equities market.
The NSE All-Share, NSE 25, and NSE 20 indices were up 14, 10 and three per cent respectively in H1 2021 compared to 17 per cent, 22per cent and 27 per cent drop in H1 2020 on the back of the economic impact of the measures imposed to contain the pandemic.
Excluding the impact of the Old Mutual Life Assurance Company consolidation, investment income was up 90 per cent
Net claims payable were up 48 per cent driven partly by increased medical claims relating to Covid-19 cases and hardening of reinsurance terms in 2021 that has led to reduced reinsurance recoveries.
Excluding the impact of the OMLAC first-time consolidation, net claims payable were up 30per cent.
Operating expenses were up two per cent over H1 2020. Costs have remained well contained driven by operational efficiencies on the back of the technology investments we have been making in recent years.
Factoring out the impact of the OMLAC consolidation operating expenses were down eight per cent.
Interest costs on borrowings were down eight per cent on HY 2020 driven by forex losses on the dollar-denominated debt in the previous year.
''We refinanced our dollar-denominated debt in the second half of 2020 and as such eliminated the forex mismatch risk,'' Oginga said.