Sanlam comes good with Sh71m profit turnaround

Sanlam Kenya doubles its profits. (Photo: Courtesy)

Listed insurer Sanlam Kenya has more than doubled its profit for the full-year ended December last year to Sh71 million.

The firm, which rebranded from Pan Africa Insurance Holdings at a time its earnings had declined by 97 per cent, appears to have turned a corner after an impressive performance from its general business, prompting it to withdraw a profit warning it had issued in December.

The profit is, however, still way below the high of Sh1.25 billion posted in 2013. In 2014, the firm's earnings dipped by 30.3 per cent to Sh871.1 million followed by another major slump of 97 per cent to just Sh27 million a year later.

On both occasions, the firm had to issue profit warnings in line with Capital Markets Authority (CMA) regulations.

According to the company's set of financial statements, last year, Sanlam General Insurance registered a 92 per cent reduction in operating loss from Sh302 million in 2015 to a loss of just Sh24 million.

The management attributed the development to its transformation programme after acquiring Gateway Insurance.

Gross written premiums from the business during the period under review grew by 58 per cent to Sh1 billion even as policy holder benefits and claims decreased by more than half (75 per cent) to Sh135 million.

The reduction in losses was also supported by a decision by the firm to discontinue underwriting pubic service vehicles as well as improved non-motor to motor business mix.

Chief Executive Mugo Kibati said the results were delivered against the backdrop of a challenging business environment, including a depressed stock market, changes in business valuation and introduction a cap on the cost of credit.