BIHL pins hope on digital strategy
will continue to drive internal synergies as well as mutually beneficial partnerships with key clients.”
The group’s asset management business operating profit increased by 87 percent due to improved Assets Under Management position from the previous year leading to a higher fee income earned. Lesetedi explained that share of profits of associates and joint ventures increased by 397 percent compared to the prior year because in June 2019 there was a P106 million impairment due to a drop in fair value of Letshego Holdings Limited which did not recur this year. The other associates, Funeral Services Group, Botswana Insurance Company Limited and NICO reported significantly better results compared to last year.
However, the effects of the COVID-19 pandemic have been felt on new business as a result of travel restrictions and lockdown. Total New Business written declined by 12 percent on both individual life recurring and single premium income – this was however compensated for by a good product mix with the proportion of risk products increasing compared to prior periods. The value of new business, which represents the present value of future profits from new business premiums written during the period was flat compared to prior year despite the challenging operating environment.
Operating profit increased by 17 percent to P195 million in June 2020. The growth is mainly as a result of good business volumes on group schemes, low claims experience and low new business strain on the retail products.“As a result of COVID-19 impact, the business accelerated its digitisation projects; these will enable digital and remote selling by agents and brokers, enhanced customer experience by giving customers online capability to access policy information, as well as several options including payment of premiums,” said Lesetedi. Under the BIFM segment the group’s overall operating profit showed a decline of 12 percent year on year.
The Botswana business performed well with an 87 percent increase in Operating Profit before Tax driven by higher management fees and lower Administration expenses. The higher management fees are largely as a result of higher Assets under Management which stood at a total of P30.5 billion including P4.2 billion managed by the Zambia group. For Zambia operations the group had a poor first half due to a combination of the Kwacha depreciation and lower investment management fee rates.
As a result of COVID-19 impact, the business accelerated its digitisation projects; these will enable digital and remote selling by agents and brokers, enhanced customer experience by giving customers online capability to access policy information, as well as several options including payment of premiums