Pan Africa Insurance Holdings has said that its 2015 full-year earnings will drop by at least a quarter, growing the list of NSE-listed firms that have issued profit warnings to 15.
The insurer announced Tuesday that its anticipated profit drop is mainly the result of a sustained bear run at the securities exchange where it is heavily invested.
Pan Africa, which also posted a profit warning in 2014, expects that its net profit for the full year to December 31 will be a maximum of Sh653.3 million compared to last year’s Sh871.1 million.
The profit warning brings to 15 the number of listed companies that have to date announced an expected sharp drop in earnings compared to the 11 that did so last year.
“The significant decline in profitability is mainly attributable to adverse equity market conditions experienced during the year compared to the same period in 2014,” Pan Africa said in a statement sent to the NSE.
“Should the equity market performance not improve towards the end of the financial year, it is expected to result in unrealised marked-to-market losses on quoted equities in our life business.”
UAP Insurance, which is not quoted but trades on the over-the-counter market, also gave a profit alert last Thursday, highlighting the impact the NSE’s poor performance has had on insurance firms.
Pan Africa’s net profit for the six months to June stood at Sh264 million compared to Sh390.8 million in 2014, with management attributing this drop to Gateway’s loss.
“Our general insurance business acquired early this year is also expected to experience an underwriting loss,” the firm said.