The half year ended 30 June 2020 saw the Nation’s largest financial services group, the Botswana Insurance Holdings Limited (BIHL) Group, release its financial results on the 2nd of September 2020 at the Avani Gaborone Resort & Casino. The financial results saw the life business of the Group, Botswana Life, deliver a robust set of financial results, showcasing their strength and resilience in the midst of a hostile market environment.
Botswana Life’s operating profit noted an increment of 17% from P166 million in June 2019 to P195 million in June 2020. This was a result of good business volumes on group schemes, low claims experience and low new business strain on retail products. The recurring premium income grew by 10% from P712 million in June 2019 to P781 million in June 2020 due to growth in group lines. However, the life business was impacted by the effects of the COVID-19 pandemic, with a decline in total new business of 12% on both individual life recurring and single premium income and a 5% decline in net premium income mainly due to low new business volumes on single premium income lines.
Noted the BIHL Group CEO, Catherine Lesetedi, “The impact of COVID-19 goes far beyond the disease itself. The current reality of the situation is that the virus has caused massive economic disruption and uncertainty in the world with the loss of many lives and businesses facing great difficulties during this time; our business was not exempt. The life business has experienced the ripple effects of the COVID-19 pandemic which affected new business as a result of the National lockdowns and travel restrictions. Despite these challenges, the Botswana Life team persevered and delivered a strong performance for the performance under the review thus ensuring our continued progress and growth. As the BIHL Group, we remain committed to supporting the people of this Nation and fighting this pandemic together in solidarity.”
Botswana Life compensated for the decline in total new business through a good product mix with the proportion of risk products increasing compared to prior periods. As a result of the COVID-19 impact, Botswana Life has accelerated its digitisation offering to enable digital and remote selling by financial advisors and brokers and enhanced customer experience through the offering of online services including access to policy information and payment of premiums. The value of new business, which represents the present value of future profits from new business premiums written during the period remained flat at P66 million in comparison to the previous year despite the market headwinds.
Botswana Life CEO, Ronald Samuels, said: “As Botswana Life, we are pleased to announce another successful review period, especially in tough market conditions. The uncertainty caused by COVID-19 is expected to continue to affect the results with social distancing measures and travel restrictions forecasted to negatively impact private consumption. However, despite this, we expect to achieve continued growth for our shareholders and prevail against all odds as we have over the years. We have been working tirelessly to implement key initiatives and new developments to ensure our continued progress and growth as a business. Looking ahead, we remain largely optimistic and look ahead into the future with great confidence in our strategy and our people whom are dedicated to being an operation of excellence.”
Overall, the BIHL Group continued on its upward trajectory announcing increments in earnings across the board. Recurring premium income increased by 10% to P812 million and profit attributable to equity holders increased by 45% to P264 million. The BIHL Group’s return on Group embedded value increased to P4.69 billion from P4.38 billion from the previous year, allowing for P214 million dividends paid during the period.
The Group remains well positioned in terms of assets under management and solvency. This was taken into consideration by the Board when resolving an interim dividend of 57 Thebe per share net of tax.
💡Got news for us? Send us an email 👉 [email protected]