2018 CLAIMS ON KENYA'S BRITAM HOLDINGS PLC.

The year 2018 ended with a huge claim on Britam Holdings PLC which it could not absorb: Loss of Ksh 6.90 on each Ksh 100 income within the year.

This compares very unfavourably with profit of Ksh 2.69 on each Ksh 100 income in 2017.

Britam Holdings is one company with very many sources of income but in 2018 all the major streams failed to deliver the goods.

Gross Premium had increased by 4.43% to Ksh 24,325.1m but 8.78% growth in reinsurance to Ksh 3263.5m reduced the final  earned premium  to Ksh 21,061.7m, up only 3.76%.

With this marginal growth in its core income, and relatively poor performance from some other streams, total income ended up by only 1.91% to Ksh 32,748.2m.

The further slow down came from 25.5% decline in Other income to Ksh 195.1m; 16.5% decrease in property income to Ksh 507.2m and 13.1% drop in fund management fees to Ksh 661.1m

Growth in other income streams were fairly OK but not good enough to counter the downward pull of the poor streams.

For example, fair value income realised grew to Ksg41.9m from 2017 loss of Ksh 88.3m; interest and dividend earned rose 21.9% to Ksh 6160.4m  and commission earned increased by 15.2% to Ksh 857.4m, but total income, finally grew only marginally.

Then, to make matters worse, Britam Holdings' major expenditure heads refused to go down. Net insurance claims grew by 14% to Ksh 14,247.1m; and  operating expenses increased by 12.1% to Ksh 8244.6m.

Among the expenses that declined were finance costs ( down 23.6% to Ksh 905.6m); interest payments dropped by 31.4% to Ksh 1688.6m and commission paid reduced by 0.59% to Ksh 3313.9m.

In the end, Britam Holdings ended 2018 with Ksh 2,259.9m loss compared to Ksh 865.8m profit in 2017.

BRITAM HOLDINGS. Full yr Ksh m
                           2017.        2018
Total income.    32748.2.   32135.1
Gross premium 24325.1.   23293.3
Reinsurance.       3263.5.     3000.2
Net premium.    21061.7.   20298.1
Fund mgt fees       661.1.       760.6
Property income.   507.2.      607.6
Dividend etc.        6160.4.    5054.0
Fair value                  41.9.     (88.3)
" unrealised.       (3091.2).   1413.1
Commission.          857.4.      744.5
Other income.         195.1.     261.9
Net claims.          14247.2.  12498.8
Interest paid           1688.6.    2462.1
Operating cost        8294.1.   7355.8
Finance costs.          905.6.   1186.1
Commission paid   3313.9.  3520.2
Profit b4 tax.          (2259.9)    865.8
Profit margin %         (6.90)    2.69

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