BIHL Group Presents Financial Results

09 March 2022

GABORONE - The Botswana Insurance Holdings Limited (BIHL) Group today shared its abridged audited financial results for the financial year ending 31 December 2021 before stakeholders in Gaborone, reporting on a period in which the impacts of COVID-19 continued to be felt. As cautioned by the Group prior, profits liens were considerably impacted, largely attributable to increased claims during the year as a direct result of the pandemic.

Despite strong revenue lines, including a 7% increase in net insurance premium to P3.1 billion and a 17% increase in fee revenue to P128 million, operating profit decreased by 56% to P171 million, and core earnings decreased by 54% to P197 million.

. Said the Acting Chairman of the Board of the BIHL Group, Mahube Mpugwa, “The Group showed robust results during the period, with strong revenue lines across the board. However, the major contributor to the decline in operating profit was the unprecedented amount of COVID-19 claims which impacted all risk product lines. This was to be expected. Indeed, what we remain proud of and committed to, however, is that we vowed to be there for our clients and customers when they needed us, and this is exactly what we worked to do in ensuring all claims were paid out during this heart-wrenching time in our clients’ lives. Of course, this bore an impact on our results.”

Other markers on the financial performance of the BIHL Group for the period included:

Recurring premium income increased by 15% to P1.9 billion

Value of new business increased by 37% to P176 million

Assets under management increased by 19% to P36 billion

Operating profit decreased by 56% to P171 million

Core earnings decreased by 54% to P197 million

Embedded value increased by 11% to P5.33 billion. (Dec 2020: P 4.78 billion)

Return on Group Embedded Value decreased marginally to 12% (Dec 2020: 13%)

The business is well capitalised, required capital for the group subsidiaries is covered 6.8 times (Dec 2020: 6.3 times) . P183 million was paid as dividends during the period (Dec 2020: P424 million), and the Board has proposed a final dividend of P200 million net of tax (Dec 2020: P184 million net of tax).

. Said the BIHL Group CEO, Catherine Lesetedi, “The focus continues, across the Group, on ensuring continued resilience and an ability to absorb any further negative shocks and fluctuations. This is where our prudent and indeed conservative approach as a business has proven to have strong merit. There has been an increase in claims due to general excess mortality and COVID-19 related claims during the year. We have seen an improvement in mortality since the vaccine rollouts, which continue to give us great hope as we strive for less volatility brought on by mortality and restrictions. We need to recognise that the economic impact of the pandemic remains high; the general household’s disposable income remains under pressure. The situation is made worse by the rising cost of living, virus mutations and the aftermaths of COVID-19 including increased morbidity risk. We will be implementing appropriate actions to mitigate these risks to ensure the Group’s value proposition remains sound going into the future. The risk mitigating actions include driving profitable topline growth to ensure the business can navigate the current pandemic while delivering much-needed support to our policyholders.”

The Group continues to augment efforts to safeguard the safety and wellbeing of employees and clients from the risks of transmissions. This includes such actions as the introduction of a hybrid structure of working between office and home, dispersing essential staff in several locations and ramping up the use of digital channels to limit face to face interactions.A steady adoption of digital platforms has been observed with an acceleration in the second half of the period. The Group will continue to explore ways to limit unnecessary face to face interaction between staff and clients while ensuring that the quality of service remains uncompromised. The focus on collaboration within the Group with a view towards ensuring greater synergies, shared value and mutually beneficial partnerships to benefit clients and customers continues.

. Concluded Lesetedi, “We would like to thank all our Clients, Brokers, Agents, Staff and other Stakeholders for the on-going partnerships and support and look forward to serving them in the future.”

ENDS .

BIHL Group Presents Financial Results

Taazima Kala-Essack

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