BIHL’s profit up 2%

SHARE   |   Monday, 05 September 2016   |   By Staff Writer
Catherine Lesetedi-Letegele Catherine Lesetedi-Letegele

 The life business of Botswana Insurance Holdings Limited (BIHL) operating profit increased by a moderate two percent, supposedly due to subdued operational earnings from key business lines under challenging operational conditions. The diversified group, which has an asset management business as well under its portfolio, has said in its financial results published on Friday. BIHL – under the leadership of Catherine Lesetedi-Letegele – said the asset management business was adversely affected by underperforming global equity markets while legal insurance business was adversely affected by additional claims provisioning and increased operational cost. “Investment income which comprises dividend income and interest income increased significantly compared to prior year.

Investment losses were incurred on shareholders assets that can primarily be ascribed to underperformance in global equity markets. This area remains susceptible to market volatility,” the group said in a statement. Regarding the life insurance business, net premium income is reported to have decreased by 11 percent year-on-year at P1.145 billion compared to P1.292 billion for the comparative six months. The decrease was mainly due to a number of material single premium transactions relating to retirement schemes that were concluded in the first six months of 2015 and were not repeated in 2016.

On the asset management side which is run Botswana Insurance Fund Management (BIFM), operating profit for the period decreased from P25m to P22m year-on-year owing mainly to the significant decrease in Asset Under Management (AUM) experienced in 2015 as well as the volatility in global investment markets. Financial performance for the first part of the year in the life insurance sector, BIHL said, has been subdued with an operating loss of P0.7 million compared to P1.3 million operating profit recorded for the first half of 2015. This lower result has come about from increased operating costs and increased open claims provisions to reflect an accurate estimate of all potential claims as a prudential measure.