The Voice (Botswana)

Insurance claims on the rise due to Covid-19

- BY KABELO ADAMSON

The insurance industry has experience­d a surge in claims, largely due to Covid-19, with the situation unlikely to change any time soon.

In a statement accompanyi­ng the financial results for the half-year period, Botswana Insurance Holdings Limited (BIHL) CEO, Catherine Lesetedi, revealed there has been an increase in claims due to general excess and mortality and Covid-19.

Lesetedi grimly noted that the uncertaint­y surroundin­g the arrival of vaccines means the situation is likely to continue for a while.

“The unpreceden­ted level of excess mortality presents risks to the business. Management will be implementi­ng appropriat­e actions to mitigate this risk to ensure the group’s value propositio­n remains sound going into the future,” stated the Chief Executive Officer.

According to Lesetedi, the risk-mitigating measures include driving profitable top-line growth to ensure the business navigates the current wave while delivering support to its policy holders.

During the six-month period under review, the listed insurance group, which is the parent company of Botswana Life, experience­d an unpreceden­ted 48 percent year-on-year decline in operating profit to P102 million.

“The major contributo­r to the decline in operating profit was the unpreceden­ted excess mortality experience­d during the period. P119 million worth of claims were classified as Covid-19 claims across the different product lines, representi­ng 29 percent of the total claims,” outlined Lesetedi.

The net insurance claims and benefits paid during the half-year period are said to have increased by 44 percent compared to the correspond­ing six-months.

Due to the massive drop in profits, BIHL shareholde­rs will go home empty-handed as management have resolved not to award an interim dividend.

Lesetedi explained the decision was based on the need to preserve cash for the life business to deal with any further shocks that might arise from the Covid-19 pandemic.

The group anticipate­s the impacts of the pandemic will continue to be felt in its operations and new business for the rest of the year.

 ??  ?? BIHL CEO: Lesetedi
BIHL CEO: Lesetedi

Newspapers in English

Newspapers from Botswana