Jubilee Holdings profit flat at Sh3.1bn as premiums fall

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Insurer attributes performance to the bear run at NSE, but retains total dividend at Sh8.50 per share, same as last financial year.

Listed insurer Jubilee Holdings’ full year 2015 net profit remained nearly flat at Sh3.12 billion compared to Sh3.1 billion posted over a similar period in 2014 as its gross premiums fell during the period.

Jubilee, which also has operations in Uganda, Tanzania, Rwanda, Burundi and Mauritius saw its gross earned premiums decline by a billion shillings to stand at Sh23 billion during 2015 compared to Sh24 billion it posted in the previous year.

Chairman Nizar Juma attributed the performance to a tough year for the insurance industry which he said was caused by the bear run at the Nairobi Securities Exchange where underwriters invest part of their cash.

“The majority of insurers have had a challenging year. The stock market has taken a big hit, 18 listed companies had to issue profit warnings, four of which were in insurance,” said Mr Juma while announcing the results.

He, however, said the insurer defied a further hit as it had reduced dependency on the stock markets and diversified its investments into government bonds and other asset classes.

READ: Insurance firms sound profit alerts as stock market bear run hits hard

He cited the insurer’s investment in the energy sector, with its Tsavo Power and Bujagali subsidiaries as well as other infrastructure projects such as Seacom which he said are giving the insurer better returns.

“This has been a good counterbalance for Jubilee which has performed well not only in Kenya, Uganda and Tanzania and other countries in which it operates in,” said Mr Juma.

Jubilee’s other businesses revenues fell by Sh2 billion from the Sh16.3billion in 2015 to stand at Sh14.8 billion during the period.

The insurer’s net insurance benefits and claims also reduced to Sh11.5 billion in 2015 from Sh15.8 billion in 2014. The insurer declared a final dividend of Sh7.5 per share, bringing the total to Sh8.5 in what saw it maintain the same payout as last year.

Mr Juma, meanwhile, disclosed that the insurer is eyeing new regional markets including Ethiopia.

“We have already set up in the Democratic Republic of Congo and are awaiting for further approvals which will allow us to upscale in that country. Ethiopia also looks set to be a promising market and we are awaiting the country to open up its laws to foreign companies,” said Mr Juma.