Bullish BIHL after new assets

SHARE   |   Tuesday, 30 June 2015   |   By Kabelo Adamson
Gaffer  Hassam, CEO of BIHL with Bakwena Oitsile, Group chairman Gaffer Hassam, CEO of BIHL with Bakwena Oitsile, Group chairman


• Looking beyond Botswana
• Has a war chest to snap up financial interests
• Protecting turf while diversifying financial offerings

Botswana Insurance Holdings Limited (BIHL) has its focus on new strategic investments in the financial services industry in Botswana and in the Southern African region.
The insurance group, which this year celebrates 40 years of existence, announced in its 2014 annual report that it has already finalised capital utilisation and a substantial amount has been set aside for the strategic acquisitions.
Group CEO, Gaffar Hassam, says 2015 will be the year in which BIHL aggressively pursues this agenda with a view to making acquisitions within the industry locally and across the regions.
The strategy is part of the group’s approach to seek opportunities and diversify its offerings in the financial services sector while protecting and enhancing the already existing business. BIHL - which already has a diversified portfolio across the financial sector with focus on life insurance, asset management and short-term insurance - says it has identified that realising the goal of becoming a significant broad-based financial services in Botswana and beyond will require the group to evolve in two particular respects - how and where BIHL do business.
The only way to achieve the goal, BIHL says, is continuing with the divarication drive while at the same time finding innovative ways to differentiate its brands and offerings in the intensely competitive market.
In 2014, BIHL introduced a number programmes and initiatives that are part of the long plans to achieve sustainable future growth. Some of them are focusing on Bancassurance relationships with partners such BancABC and Standard Chartered Bank and leveraging investment in technology to improve client focus while investment in Letshego Holdings Limited is said to continue to impress as profits from it contributed significantly to BIHL Group in 2014.
Results of strategic focus by BIHL are believed to be forthcoming as in 2014 the group’s six percent increase in net premium income to arrive at P1.99 billion saw Botswana Life being the majority contributor by 15 percent. Botswana Life had an excellent year with the value of new business increasing by 35 percent to P148.2 million, which Hassam said was achieved in the midst of challenging operating environment as customers are under financial strain due to rising households debts, weakened Pula against other currencies, fewer jobs being created while salary increases are minimal in cases of where they exist.
The second contributor to BIHL results is the performance of the group’s associates – Letshego and Funeral Service Group (FSG). Hassam sates in the report that performance from each of the associate companies was very good during the year with an increase of the profit contribution reaching 34 percent to P253.6 million.
During 2014, assets managed by BIHL subsidiary Botswana Insurance Fund Management are said to have increased by seven percent to reach P28.9 billion. However, during the same period, BIFM lost a lucrative P9 billion worth of contract following termination by Botswana Public Officers Pension Fund (BPOPF), which has obviously lessened assets under management by BIFM.
Regarding short-term insurance, which is administered through the subsidiary, BIHL SURE!, the group took the decision in 2014 to sell the general lines book to Botswana Insurance Company (BIC) following a series of underperformance by the venture as Hassam notes that prospects of turning the business around were slim.



Related news