The life business insurance segment under Botswana Life Insurance Limited (BLIL) subsidiary continues to maintain reliability in boosting profits of Botswana Insurance Holdings Limited Group (BIHL).
Botswana Life registered 11% increase in net premium income from P1.15 billion in June 2018 to P1.28 billion for the period under review, the Group has revealed on Thursday sharing results
Moreover, Botswana Life also noted growth in recurring premium income of an impressive 12% from P634 million in June 2018 to P712 million in June 2019, representing a sustainable source of profits in the long term.
Giving an operational overview of the group BIHL Chief Executive Officer, Catherine Lesetedi, said the first period results show strong resilient despite increasing low insurance intake locally.
Lesetedi bemoaned that insurance penetration in Botswana remains low as compared to other SADC market counterparts in Namibia and South Africa respectively.
She said insurance intake in Botswana stands at 3% now, adding that this could have possibly impacted on the poor claims experience on group schemes.
However, BIHL group CEO remained optimistic on the results, saying operating profit has improved marginally by 1% over the six (6) months to June compared to same period last year.
“The life insurance business continues to be a major source of income to the group. Botswana Life in subsidiary contribution towards operating profit contributed share of 92%, BIFM 7% and Legal Guard 1%. In addition, the life cover business also contributed 2% in the operating profit of P172 million for this period,’’ she underscored.
Lesetedi indicated that BIHL group anticipates that the recent bank rate adjustment by the central bank from 5% to 4.75% will open opportunities for more customers spending on the insurance products.
She said the process is expected to contribute significantly towards the end of year results. On tax paying, she said, the group has also been consistent in paying its tax as it has now paid tax amounting to P850 million to Botswana Unified Revenue Service (BURS) since 2010.
The share of profits for group associates and joint ventures decreased by 38% and – according to Lesetedi – the massive decline is attributable to a drop in fair value of Letshego Holdings Limited.
Nonetheless, other BIHL associates, Funeral Service Group (FSG), Botswana Insurance Limited (BIC) and NICO reported satisfactory results as compared to the last financial year.
Kudakwashe Mukushi, Chief Finance Officer at BIHL group, said the recurring income grew by 12% from this P634 million to P712 million referencing the improvement towards the partnerships that the business keep on forging so as to diversify the means of sourcing profit.
He noted that the directors have resolved to award an interim dividend of 44 Thebe per share, saying that BIHL is not in any position to review or amend the dividend policy in the meantime.
BIHL group board Chairperson Batsho Dambe-Groth said the first half of the 2019 financial year was challenging for the life business; however Botswana Life team persevered against all odds in a tough economic climate.
She expressed worry that the global economy is forecasted to slow down in Q2 of the year; hence the situation is likely to lead to markets being volatile, resulting in export decline. But she remained optimistic that the group will survive that due to its diversified innovative products and services also banking into underway technology growth projects.