- Total assets closed the year at Sh11.5 billion, up 26% from the previous year, thanks to increased investments.
- Return on equity (ROE) was 50.3%
Image: TIMSKY MEDIA
Absa Life Assurance Kenya (Absa Life), a subsidiary of Absa Group has reported a 90 per cent increase in headline earnings to Sh862 million for the financial year ending December 31, 2023.
The insurance arm of the bank has attributed the growth to investments in product diversification, digital capability expansion, and enhanced distribution channels.
Supported by a growing customer base and prudent cost management, key performance indicators rose by double digits fuelling the robust financial results despite an unpredictable operating environment.
Insurance services revenues increased by 29 per cent to Sh5.9 billion, driven by new product lines, including the flagship endowment plan launched last year, demonstrating Absa Life's commitment to providing relevant financial solutions that meet the needs of its clients.
Investment income increased by 27 per cent to Sh1.1 billion, reflecting Absa Life's philosophy of investing funds in high-yield options that optimize investment returns.
Speaking about the financial performance, Absa Life’s principal officer and MD Githanji Waiguru noted the value they continue to drive through their portfolio.
“Absa Life continues to maintain a healthy quality of portfolio in the products we provide to the market and the policies that we underwrite, which is a clear testimony to the value we continue to drive both for our policyholders and the shareholders, and these results serve as a clear demonstration to this,” he said.
He says that this aligns with Absa Group's corporate purpose of empowering Africa's tomorrow together, one story at a time.
In the year under review, insurance contract liabilities increased by 21 per cent year on year to Sh8.6 billion, owing to the acquisition of more policyholders.
Total assets closed the year at Sh11.5 billion, up 26 per cent from the previous year, thanks to increased investments.
Return on equity (ROE) was 50.3 per cent, up 18 per cent year on year, with the company distributing Sh450 million in total dividends to the shareholders.
“It is important to note that the current financial statements are based on IFRS17, the new global reporting standards for insurance companies that replaced IFRS4 on January 1, 2023."
Waiguru explained Absa Life had made significant investments in its technology infrastructure, which resulted in the automation of its systems and operational processes, translating to gains in operational effectiveness and efficiencies.
"This has supported the expansion of the business by providing a seamless customer experience, resulting in topline growth without compromising capacity."
Among others, Absa Life improved its digital capabilities through a revamped company website with enhanced customer interaction capabilities and continued to diversify its distribution approach to include collaborations with strategic partners such as insure-techs and other insurance service providers.
According to the MD, the digital transformation agenda has helped to improve efficiency and customer interactions while also making Absa Life's products and services more accessible and affordable
"Absa Life will continue to engage and listen to its customers, guided by the principles of empathy and seamless customer experience, while also investing in new distribution models to increase insurance penetration in Kenya,'' Waiguru said.
The company remains well-capitalized, with strong headroom above the adequacy ratios, demonstrating its ability to accelerate its innovation agenda and fuel additional investments for future growth.