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Asset management boosts BIHL profits

Publishing Date : 12 March, 2018


Botswana Insurance Holding Limited’s operating profits increased by 18 % in the last financial year.

Sharing the results this week, BIHL Group Chief Executive Officer, Catherine Lesetedi-Letegele revealed increased total assets under management which seats at 26.7 billion pula including Zambia’s 4.1 billion in 2017 compared to 25.9 billion at the close of 2016 trading year indicating a 4 % increase. The BIHL subsidiary, Botswana Insurance Fund Management (BIFM) outperformed other segments by showing a continued trend in growth and profitable returns, Lesetedi-Letegele said.

Lesetedi-Letegele noted that her company was pleased with the asset management business performance: “Our assets under management (AUM) portfolio have continued its upward trajectory and the business has also successfully driven increased operating profit margins.”
“A relatively stable market performance in BIFM’s local and regional businesses also delivered a positive impact on asset management fee incomes consequently boosting our entire Group balance sheet,” she highlighted.

BIHL revealed that the Zambia asset management business performed well due to stable market performance and a favorable Kwacha performance.  “All these factors had a positive impact on the outcome of this key segment of our business, we continue to efficiently manage and control costs across all business to ensure good overall business performance,” said Lesetedi –Letegele .

Further deliberating on Botswana Insurance Fund Management performance Letegele highlighted that profit before share of profit of associates and joint ventures under BIFM increased by 13% to P78 million in 2017 from P67.6 million in the corresponding period. The subsidiary‘s total profit for the year increased by 16% from 65.8 million in 2016 to P78.2 million in the year under review.

For other businesses Botswana Insurance Holdings Limited reports that their Life Insurance segment which is housed under Botswana Life realized net premium income growth of 12 % from 2.07 billion in 2016 compared to 2.32 billion in 2017 with all income lines posting growth of at least 7 % and above. Still under the Life Insurance segment total new business written grew by 11 % underpinned by strong single premium income performance.

Under short-term insurance business, BIHL reports that premium income was 6 % lower compared to the previous year mainly due to increasing defaults from clients failing to meet their premium obligations. “Improved claims administration on the new administration platform saw operating profit increasing from 0.5 million in 2016 to 1.3 million in 2016,”  Lesetedi-Letegele shared. She observed that this were commendable results considering the one-off restructuring costs amounting to 2 million pula that were incurred during the year under review.

Further financial highlights at Group level indicate that BIHL total net income increased by 30% to P3 billion compared to P2.1 billion in 2016. The company’s group total assets increased by 7% to P15.6 billion compared to P14.4 billion in the previous year. However the BIHL Group profit before tax decreased by 18% to P469.6 million from over P575 million pula in 2016, this, according to the Group Chief Executive was underpinned by significant resources invested into refining business operations.

Lesetedi-Letegele also shared with stakeholders that Botswana Insurance Holdings Limited received approval from the shareholders on the BIFM Citizen Economic Empowerment initiative tabled at the Emergency General Meeting. “We are pleased to state that 25.1% of the BIFM shareholding will be given to staff through a staff performance share scheme,” she said

She further stated that her company continues to focus on key twin strategies of growth and profitability. “Though prospects for the economy remain mixed, reflecting both slower domestic growth and international economic uncertainty, we have successfully maintained capital management and solvency targets and the group remains well positioned,” she stated.



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