Britam Holdings yesterday announced a marginal drop in profit before tax, posting Sh2.3 billion for period ending June 2020 compared to Sh2.4b reported in a similar period last year.
The NSE-listed company investment firm says the dip in profits follows the coronavirus knocks on the operating environment particularly on investments in listed equities and property.
However, the firm said its gross revenue grew to Sh13.8 billion, a 9 per cent jump from Sh12.6 billion it reported in a similar period last year and attributed this to improved international insurance business revenue.
Its operating costs declined by six percent on the back of a nine percent revenue growth, while the company’s total assets increased to Sh128.5 billion, representing a growth of three percent.
Britam’s Chief executive Benson Wairegi said the negative results follows reduced activities at the Nairobi bourse as investor preferences shifted to fixed income securities as well as property revaluation which contributed to the loss of Sh929 million by the firm due to the depressed property market on low occupancy levels and depressed rental yields.
“The Group’s fundamentals remain strong and we are on track in the execution of our Strategy and coupled with an improved operating environment the Group’s performance outlook is positive,” said the group’s Chief executive Benson Wairegi.
Britam’s Life Assurance business continued to underwrite profitable new business with the embedded value closing at Sh17.0 billion for the period to 30 June 2020, with an annualised return of 9 per cent.
The insurance industry is reeling from virus-induced shocks, with several businesses expected to continue to feel the pinch as a direct result of the pandemic.
Even as majority of insurers and reinsurers do not cover pandemic risks, as a matter of policy, they expect an upsurge in claims indirectly related to the pandemic, according to industry experts.
A reduction in gross written premiums is expected to be experienced across the industry.