Britam, UAP bounce back to profitability
By Dominic Omondi | September 1st 2021
Financial services firm Britam has moved out of the loss-making territory to record a net profit of Sh376 million. The firm attributes the improvement to economic recovery and optimism at the Nairobi Securities Exchange (NSE).
This was an improvement from a loss of Sh1.63 billion that the firm booked in the first six months of last year due to the adverse effects of the Covid-19 that impacted the stock market.
The insurer’s total income increased by more than half to Sh19.7 billion compared to Sh12.9 billion in the same period last year.
Much of the income growth was due to re-evaluation of its assets, which increased from a loss of Sh3.3 billion by the end of June last year to a net gain of Sh1.37 billion. The firm’s investment income increased by 35 per cent to Sh4.9 billion.
Britam Group Managing Director Tavaziva Madzinga said the company remains optimistic about 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,” said Madzinga.
UAP Old Mutual, another insurer, has also seen improved financial performance during this period. The firm bounced back to profitability despite an increase in insurance claims.
The insurer made a net profit of Sh252 million compared to a loss of Sh305 million in the first six months of 2020.
UAP grew its investment income by more than double to Sh2.9 billion from Sh1.3 billion.
UAP Chief Executive Officer Arthur Oginga noted they had seen positive results at the NSE indices and economic data as at end of June which speaks to the initial stages of the recovery. “The highlights for our business in this period include strong topline growth, return to profitability and positive cash flow from operations,” said Oginga.
The firm reported an increase in net claims payable to Sh7.2 billion over the six months, from Sh4.85 billion last year.
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