BIHL operating profit up 67%
Botswana Insurance Holdings Limited ( BIHL) Group continues to thrive as it announced its abridged audited consolidated financial results for the 6 months ended June 2022. The results were announced before key stakeholders and subsidiaries ( Botswana Life, BIFM and Botswana Insurance Limited).
The Group indicated that its operating profit increased by 67percent to P193 million over the 6 months to June 2022 as compared to last year. Botswana Life’s operating profit improved by 78percent yearon- year from P102 million to P182 million. The growth is mainly a result of lower COVID- 19 related claims compared to the year 2021. The country- wide COVID- 19 mortality rate was reduced due to the improved access to vaccinations, which led to the review of claims assumptions that have had a positive impact on the half- year results. The business is well capitalised at 7.7 times and P200 million was paid as dividends during the period ( Jun 2021: P184 million). The interim dividend proposed of P184 million net of tax ( Jun 2021: Pnl).
Speaking at the results announcement event, the BIHL Group Acting Chairman, Mahube Mpugwa, “The year started with an overall positive business sentiment and many businesses had an optimistic expectation following good reports of a successful vaccine rollout, reduction in reported COVID- 19 cases and caseseverity; as well as easing of restrictions that had previously inhibited normal business operations. Credit extension figures also showed a significant improvement, particularly an increase in lending to firms, signalling an improvement in business conditions and better prospects for local firms in the near future. However, this optimism was watered down as the year progressed as the Russia- Ukraine conflict ensued, resulting in rising cost pressures, particularly fuel prices. Yet, we remain hopeful that inflation will subside and we are grateful to the Government’s intervention when VAT was reduced from 14percent to 12percent.”
This year has had its pitfalls because the value of new business decreased by 12percent to P71 million compared to the prior year. New business volumes for the individual life retail are continuously decreasing each year and this also includes affinity schemes as compared to the prior year. The drop in volumes affected our high- margin portfolios which exacerbated the deterioration. The annuity portfolio performed marginally better than last year in terms of sales however the value of the new business earned was lower on account of reduced VNB margins due to repricing.
The Group’s capital management and solvency remain strong. The Board of Directors has confidence in the Group’s ability to maintain dividends at this level while ensuring that its capital position remains solid and aligned with future capital requirements while sustaining healthy levels of Return on Group Equity Value.
On that note, the business continues to focus on its digitalisation strategy in order to improve client experience and achieve operational efficiencies ensuring the Group’s value proposition remains sound. The Group prides itself on its dedicated employees and will continue to support and develop initiatives to cushion and navigate the current economic hardships. BIHL Group Chief Executive Officer, Catherine Lesetedi said, “We would like to express our gratitude to all of our clients, brokers, agents, employees, and other stakeholders for their continued collaborations and support, and we look forward to continuing to serve them in the years to come.”