UAP’s profit rises 46.5pc to Sh1.21b

Closing 100 loss-making accounts of some of UAP Holdings’ biggest clients helped the firm to almost double its profit last year.

UAP’s full-year net profit for 2017 rose to Sh1.21 billion from Sh826 million in 2016, representing a 46.5 per cent.

Despite the increase in profit, UAP saw its gross written premiums decrease marginally by 0.5 per cent from Sh19.3 billion to Sh19.4 billion during the period under review.

Net earned premiums, on the other hand, increased with a similar 0.5 per cent margin to Sh15.5 billion from Sh15.4 billion a year earlier.

UAP Old Mutual Group Chief Executive Peter Mwangi said the decision to close some accounts was informed by the fact that they were drawing huge claims.

This was in addition to a minimal 4.5 per cent saving in other general claims, especially in the health segment.

“We had to close more than 100 accounts that were making losses. Improved underwriting and a reduction in loss ratios also saw us cut claims expenses and other benefits payable to claimants,” said Mr Mwangi at an investor briefing in Nairobi yesterday.

Investment income

He said a reversal of two consecutive years of a bear run at the Nairobi Securities Exchange (NSE) also helped increased profits.

“At the same time, stable returns from fixed income and an increase in rental income from our investment properties contributed to a 27.9 per cent increase in investment income compared to the prior year,” said Mwangi.