Botswana Insurance Holdings Limited (BIHL) Group gives shareholders the gift of positive returns ahead of its 40th birthday, as the business announces pleasing financial results. The Group’s financial results for the year ended 31 December 2014 see an increase in, most notably, revenue, earnings and embedded value.
“2015 marks a significant milestone for the BIHL Group as we celebrate 40 years of contributing to the financial services industry as well as the development of our country. Throughout the years we have been providing innovative insurance and investment solutions to our clients which we are proud of, proven by our successful track record, coupled with consistent honouring of our promises to clients. It is an even greater pleasure to celebtrate this 40 year milestone through presenting our shareholders with strong dividends for the period,” noted Mrs. Batsho Dambe-Groth, Chairman of BIHL Group.
The Group registered profits after tax of BWP5.1 billion. In addition, the Group’s embedded value saw an increase of 17% to BWP3.8 billion. Operating profit before tax increased by 4% to BWP287.2 million, and all business lines contributed positively to this performance. Assets under Management saw an increase of 7% from BWP28.9 billion during the period. Net premium income increased by 6% to BWP1.99 billion, whilst fee income increased by 13% to P111.0 million.
“Against the background of fragile global economic growth, we can expect positive growth in emerging markets and developing countries. While the outlook for Africa is positive in terms of investment destination, however, uncertainties in some oil rich countries such as Nigeria are a concern as low oil prices put considerable pressure on those countries’ public finance. Locally, we are fortunate to have recorded a commendable year-on-year growth,” commented BIHL Group CEO, Mr. Gaffar Hassam. “Botswana’s growth rate is estimated at around 5%. Inflation is well within Bank of Botswana’s target range of 3 to 6% and the inflation outlook looks positive on account of worldwide oil price decreases, weak outlook for the European economy and weaker demand worldwide. Against this economic climate, we are satisfied with the year end financial results and the outlook for the Group and its subsidiaries.”
The value of new business within the period increased by 35% to BWP148.2 million. This growth is off the back of increased volumes across all product lines in the life insurance business. Key initiatives have been underway across the BIHL Group of companies as part of the Group’s strategy to become a fully-fledged financial services operation. The Group has made considerable efforts to strengthen and stay true to the twin strategies of growth and profitability. This is most evident through changes within the short term insurance business, with the short term book sold to Botswana Insurance Company effective 31 August 2014. Following the decision to withdraw from the general insurance market, the business has refocused on the Legal Guard Division. “2014 marked the 10th anniversary of the introduction of Botswana’s first ever legal assistance solutions: Legal Guard. We are pleased to report that the optimization of Legal Guard has begun to bear fruit both in terms of growth in customer base and improved financial performance,” noted Mr. Hassam. The process is expected to continue into 2015, building on the successes achieved thus far by re-aligning products to meet current market requirements and improving the customer experience of Legal Guard.
“Looking ahead, we will focus on defending our market share as we continue to offer our clients and customers the highest level of service. We will focus on diversifying the profit sources through acquisitions in financial services in Botswana and in the Southern Africa region. The continued uncertainty in the global markets is expected to continue to affect the results, but despite this, we expect to achieve continued growth for our shareholders, and thank all our Clients, Brokers, Agents, Staff and other Stakeholders for the on-going partnership and support,” concluded Mr. Hassam.