• Botswana Life biggest contributor, with its profit growing to P188 m
• BIFM loses out as assets under its management decline
• Legal Guard revenue up 22%
Botswana Insurance Holdings Limited Group (BIHL) has made a profit after tax of P288 million for the six month period ending June 30, the group announced earlier this week.
The group - which has under its portfolio a life insurance, asset management and the general insurance which provides legal insurance - attributes its growth to its strategic focus on growth and profitability.
The twin strategy of growth and profitability is said to have been the major driver of good performance by BIHL group with its life insurance segment through Botswana Life being the major contributor to the group’s overall profits.
The segment registered a 17 percent year-on-year growth as profit grew from P162 million to P188 million. The group says operating results under this segment were aided by strong positive investment returns mainly coming from offshore markets as well as improving lapse experience.
In the asset management section under BIFM, there was a decline in profits during the last six months ending 30 June 2015. Year-on-year operating profit of the subdivision declined by 30 percent due to reduction of assets under management. As it stands, total assets under management (including Zambia’s P4 billion) stand at P20.5 billion.
“The business has concluded realignment processes that will ensure that it is optimally structured to keep delivering superior client service; this resulted in once-off restructuring expenditure that also contributed to the reduced profit,” said the group CEO Gaffar Hassam in a statement.
In other business of BIHL, the short-term insurance business segment delivered a 22 percent increase in revenue. Following the sale of the general insurance business to Botswana Insurance Company (BIC) in 2014, the group says it then put its focus on its remaining operating division, Legal guard.
“In the short-term insurance business, 2015 saw the introduction of a new three-year strategy. This serves as a road map for guiding the business through recovery, consolidation and onwards to sustainable profitability,” Hassam said.
Hassam said the Legal Guard brand has been refreshed to symbolise the rejuvenation of the business.
“As part of the recovery phase of the strategy, the first half of the year has seen Legal Guard continuing its efforts to reinvigorate the business by increasing sales, improving the customer service experience and enhancing operational efficiencies,” he said.
BIHL performance was also boosted by performance from a number of its associates. The group holds 23 percent stake in the Botswana Stock Exchange (BSE) listed micro lender Letshego Holdings Limited and a further 33 percent in Funeral Service Group (FSG), another BSE listed company.
In the period under review, there were changes to the group’s board of directors. Robert Dommisse and Mpho Seboni resigned as directors on 30 June 2015. This has seen the former Botswana Defence Force Commander (BDF) Tebogo Masire appointed to the board of directors.