Britam Holdings posted net profit of Sh376.3 million for the half year period ended June 30, from a Sh1.6 billion loss after tax recorded within the same period last year.

Nairobi Securities Exchange (NSE)-listed insurer attributed growth to improved performance on new investment streams and increased premiums. Improved performance is a turn-around from a pretax loss of Sh2.3 billion the financial services provider registered in the same period last year.

During that period, operating expenses grew by 25.8 per cent to Sh4.9 billion on account of an ongoing transformation strategy within the firm.

Speaking while making the announcement, Group Managing Director Tavaziva Madzinga cast optimism in the firm’s local and regional businesses in the second half of 2021 amid Covid-19 concerns.

“We remain optimistic of sustaining profitability in 2021 on the back of an improving operating environment and gains from our new transformative strategy.

In the short term, we will however continue to pursue prudent cost management initiatives, and maintain a stable solvency position,”  Madzinga said.

The firm recently completed its turnaround strategy aimed at creating ‘a leaner, agile and more customer centric organisation’ for future growth.

Downsizing

Britam announced it would lay off nearly 140 employees in March this year, many of them in the management, in a restructuring exercise expected to help the firm cut down on costs.

Britam had 923 employees in the year to December 2019, according to its annual report.

The insurer will be embarking on a new business strategy, whose implementation would result in the elimination of some roles. Between 10 and 15 per cent of the staff across its business were affected from the exercise.

A bloated wage bill, as well as tough macroeconomics brought by the Coronavirus pandemic, saw the firm record a net loss of Sh9.1 billion in the year ended December 2020 when its asset management division underperformed, compared to a net profit of Sh3.5 billion it registered a year earlier.

The underwhelming performance saw the company suspend dividend payouts, having made a distribution of Sh630.8 million or Sh0.25 per share the year before.

Cushioning customers

The firm’s board stayed clear of recommending the payment of an interim dividend for the six-month period to June 2021.

Britam’s investment income for the period under review also grew to Sh 4.9 billion, a 35 per cent growth compared to a similar period last year, while regional businesses contributed 24 per cent of the Group’s gross earned premiums.

Gross earned premiums and the firm’s fund management fees on the other hand jumped by 5.7 per cent to Sh 14.9 billion, while total assets stood at Sh146.9 billion, a 7.2 per cent growth.

Claims and policy holders’ benefits and expenses increased by 27.1 per cent to Sh 11.7 billion as the business took measures to cushion customers from constraints occasioned by Covid-19 shocks.

The group has presence in seven Africa countries in Kenya, Uganda, Tanzania, Rwanda, South Sudan, Mozambique, and Malawi.