Underwriter Directline has doubled its net profit for the year ended December 2022 to Sh252.8 million from Sh119.8 million in the prior year.
The increased profitability for the motor vehicle insurer is largely attributable to a 21 percent growth in gross written premiums which hit Sh4.2 billion from Sh3.5 billion.
The company’s total income stood at Sh4.1 billion in the period from Sh3.6 billion with investment and other income at Sh373.1 million.
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Directline says the soaring premiums are a result of increased partnerships between the underwriter and market intermediaries which have served to push the momentum for new business writing.
“The growth is driven by our aggressive partnership with our intermediaries which include over 3200 agents, 83 brokers, 17 banks and a robust digital channel where customers can purchase insurance conveniently from their phones,” said Directline CEO Evans Nyagah.
The insurer managed to grow new business while managing its cost base as total expenses grew at a slower 10.8 percent to Sh3.802 billion from Sh.3.43 billion a year earlier.
Following a notable rise in returns for the year, Directline says it is set to diversify its portfolio of products to include setting up an asset management business in line with its diversification strategy launched in 2021.
The asset management business is expected to leverage the company’s growing asset base. The strategy is premised on de-risking the underwriter’s portfolio mix and investments.
Directline assets crossed the Sh7 billion mark in the year to December from Sh6.239 billion previously with investment properties making the bulk of the assets at Sh2.51 billion.
Other revenue diversification strategies sought by the underwriter include the unlocking of value in its real estate assets that are lying idle by developing the properties in response to the demand for housing in Nairobi and Coast regions.
Directline started commercial operations in November 2005, offering motor vehicle insurance.
In July 2021, the underwriter obtained regulatory approval to sell all products under the general insurance category, a move which would see Directline pivot to other direct general insurance products, including home insurance, medical insurance and personal accident insurance.
The improved performance for the underwriter mirrors higher profits for several insurance firms in the year ended December 2022.
CIC Insurance, for instance, announced the payment of a dividend for the first time in four years after growing its net profit for the period to Sh1.09 billion after restructuring.
