Britam’s Pre-Tax Profits Hit Kshs 4.82 Billion For 2023

by Business Watch Team

Integrated financial services firm Britam Holdings Plc today posted a Kshs 4.82 billion profit before tax for 31 December 2023, a sixty-five percent increment from the Kshs 2.92 billion recorded in the previous financial year ended 31 December 2022.

The improved performance is attributable to top-line revenue growth from insurance and investment activities, which has cushioned the business from fair value losses incurred from fixed-income securities.

The Group’s insurance revenue increased to Shs $ 36.4 billion, reflecting a remarkable 41% increase from Shs $ 25.8 billion in 2022. This growth was primarily driven by significant growth in both the Kenya insurance businesses as well as the general insurance regional business which contributed 29% of the insurance revenue in the year.

The Group’s total insurance revenue and fund management fees were up 40 percent to Kshs 37.1 billion from Kshs 26.4 billion in 2022. Of this amount the international businesses generated Kshs 10.6 billion, accounting for 29 percent of the total insurance business revenue. The international businesses remain a key pillar of the Group’s geographical diversification strategy.

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Kenya businesses delivered a pre-tax profit of Kshs 3.4 billion while the regional businesses contributed Kshs 1.4 billion to the Group’s pre-tax profit, accounting for 29 percent.

The insurance businesses recorded improved underwriting performance mainly driven by profitable topline growth and claims management.

Meanwhile, net investment income grew to Kshs 11.61 billion from 11.32 billion. The growth in the investment portfolio returns was driven by the ongoing realignment of the portfolio to grow and stabilize yields.

The Group’s balance sheet remains robust, with total equity increasing to Shs. 25.69 billion from Shs. 22.16 billion in the previous year. This improvement in equity highlights the Group’s strengthened financial position and underscores its ability to weather economic uncertainties.

The year under review marks the third year of the Group’s implementation of its five-year strategic plan for the period 2021-2025. The positive outcome achieved during the year indicates that the Group’s customer-centric strategy is yielding significant benefits. This strategy prioritizes the enhancement of customer value and experience, expansion of the customer base to drive growth, and improvement of efficiencies to generate better returns.

Commenting on the Group’s financial performance, Britam’s Group MD & CEO Mr. Tom Gitogo said:

“We are confident of the growth and performance trend that Britam has achieved, supported by its subsidiaries in Kenya and in the region. The business continues to grow its revenues while operating costs grow at a lower rate than the topline growth.”

Mr. Gitogo added, “Continued focus on customer-centric transformation continues to grow our customer numbers and drive the uptake of our products, especially through our emerging market consumers, partnerships, and digital channels.”

However, the Group’s profitability has been impacted by fair-value losses on investment assets, especially on its fixed-income instruments. This is attributed to the challenging macroeconomic environment which has been characterized by rising yields.

Supported by its strong brand position, Britam remains focused on seizing the growth opportunities across its footprint, innovating despite the low penetration of insurance products, and driving financial literacy.

“Looking ahead, we remain committed to driving sustainable growth and enhancing shareholder value through the continued execution of our strategic roadmap,” said Mr. Gitogo.

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