The life insurance business sector remains the major contributor to the Botswana Insurance Holdings Limited (BIHL) revenues and profits but other business sectors are also making satisfactory contribution to the group, former BIHL CEO, Gaffar Hassam said on Friday when presenting the group financial results. Gaffar was giving his last presentation having moved on to occupy a new position elsewhere. He has been replaced by former CEO of Botswana Life - BIHL subsidiary, Catherine Lesetedi Letegele who took over on March 1st this year as the new group CEO. BIHL profit for the year which ended on the 31st of December is P597.7 million – an increase of 18 percent over the same period in the year before.
In the life insurance sector, net premium grew by 25 percent from P1.95 billion in 2014 to P2.44 billion in 2015. The recurring net premium income at P1.015 billion is also stated to have breached the P1billion mark for the first time in the history of the organisation which is reported to be in line with company’s strategy of focusing on sustainable growth. On the other hand, the value of new business under the Life insurance sector, which represents value of future profits from new business premiums written during the year, has also grown by 15 percent year on year. From the asset management business, the results from the subsidiary are believed to be satisfactory despite a challenging environment as assets under management decreased by 29 percent to P20.9 billion.
Operating profit of BIFM declined by 20 percent year on year, mainly due to the decrease in assets under management. The restructuring that took place at the subsidiary is likewise blamed for decrease in profits for the year. The short term insurance business part of BIHL-Legal Guard looks to be improving. Having suffered a loss of P25.9 million in the previous year, the business has registered operating profit of P3.1 million which is considered satisfactory when taking into account difficult economic conditions that were in existence during the year. Lessons are believed to have been learnt and now the business is said to be looking to maintain the upward momentum of its performance.
Having suffered some setbacks in as far as assets under management is concerned BIHL says it has now embarked on a realignment process in response to the reduction in assets under management. The group now seeks to diversity its source of profits through acquisitions in financial services. The group has so far completed two acquisitions, a 25.1 percent shareholding in Nico Holdings- a Malawian based company and also 50 percent indirect ownership of Botswana Insurance Company (BIC).