BIHL GROUP MAINTAINS STRONG FINANCIAL POSITION AMIDST TOUGHENED GLOBAL ECONOMIC OUTLOOK

GABORONE – Botswana Insurance Holdings Limited (BIHL) Group, one of the largest financial services Group on the Botswana Stock Exchange, continues to make great strides in evolving into a fully-fledged financial services operation. Progress made in alignment with the Group’s strategy was shared by Group CEO, Mrs. Catherine Lesetedi-Letegele, along with outline of the financial results for the six months ended 30 June 2016, before key stakeholders at a recent engagement hosted by the Group.

The results point to continued strong performance across the Group, set against a climate of economic volatility, both at home and abroad. Worldwide economic growth and subdued levels of employment creation remain topical issues amidst fragility of key players in the global market. “Increasing shareholder value remains paramount to our existence. It is what drives us and guides us. It is also important to note that although it is our wish to deliver good results, we are not exempt from external forces that put us at the risk of a declining shareholder value,” noted BIHL Group Chair, Mrs. Batsho Dambe-Groth.

Key financial highlights shared include:

  • Assets under management increased by 2% to P21 billion. Net insurance premium income decreased by 11% to P 1.17 billion
  • Fee revenue decreased by 8% to P 42 million
  • Value of new business remained at P 78.9 million. Operating profit decreased by 6% to P 177 million
  • Core earnings decreased by 3% to P 208 million
  • Profit attributable to equity holders decreased by 8% to P 264 million

 

Embedded value yielded a steady increment of 2% to P4.2 billion from P4.1 billion in first half of 2015. The embedded value represents an estimate of the value of the Group, excluding the value attributable to minority interests and goodwill attributable to future new business. The embedded value was positively affected by good operating earnings, especially from the life business. The embedded value sustained an allowance for P281.1 million dividends paid during the year.

Operating profit for the life business achieved a moderate growth of 2 percent to P192 million from P188 million in the comparative six months. This performance came on the back of good performance on recurring premium business, which is naturally a more sustainable profit generator in the long term. The asset management business was adversely affected by underperforming global equity markets, while legal insurance was adversely affected by additional claims and increased operational costs. The general insurance business, however, showed growth in recurring premium income by an impressive 8% from P486 million in June 2015 to P530 million during the first 6 months of 2016.

Share of profit of associates  witnessed an anticipated increment of 38 percent to P117.6 million in this reporting period compared to P85.2 million in the first half of 2015. This was due to increased shareholdings in Funeral Services Group (FSG) and Letshego Holdings Limited, and recent investments in associates Botswana Insurance Company Limited and Nico Holdings Limited.

Concluded Mrs. Batsho Dambe-Groth, “Despite these uncertain times, we continue yield growth and sustain profitability across the Business.  It is pleasing to note that BIHL Group continues to work towards not only driving value for our customers that benefit from our seamless, competitive and relevant solutions across our subsidiaries, and shareholders who continue to reap good returns on their investments; but we have continued to explore opportunities that build us stronger relationships in the community through our various social projects. As a Group, we continue to focus on diversifying our profit sources through acquisitions in financial services as well as consolidating our new acquisitions. We press on to improve ourselves in every moment and continue to refine our basket of services, in order to reach full circle on realising an all-encompassing customer experience that provides for their needs today and is a fortress to rely on for theirs and their families’ futures tomorrow.”