Jubilee Holdings doubles its interim dividend to Sh145m


Jubilee Holdings Limited Group Chairman Nizar Juma. FILE PHOTO | JEFF ANGOTE | NMG

Jubilee Holdings has doubled its interim dividend to Sh2 per share or a total of Sh144.95 million for the half-year ended June, joining the list of a few other listed firms that are making cash distributions to shareholders.

The rise in the interim dividend from Sh72.4 million came on the back of gross insurance service revenues rising 11.4 percent to Sh9.8 billion.

Read: Jubilee completes regional unit stake sale to Allianz

Net earnings however declined on the adoption of a new accounting standard and the sale of majority stakes in its general underwriting businesses to Allianz SE which had boosted the previous year's results through gains.

Jubilee said it will pay the interim dividend on or about October 11 to members on the company’s register at the close of business on September 8.

The insurer posted a 47.8 percent drop in net profit to Sh2.04 billion in the review period on the back of the adoption of the International Financial Reporting Standard (IFRS) 17 and the absence of the Sh1.61 billion one-off gain that was booked in a similar period last year on disposal of subsidiaries.

“When implementing IFRS 17, Jubilee Holdings has adopted a prudent approach to the new standard to ensure less volatility and sustained profits in future,” said the insurer.

IFRS 17, which has replaced IFRS 4, requires a company to measure insurance contracts using updated estimates and assumptions that reflect the timing of cash flows and any uncertainty relating to insurance contracts.

The new accounting standard, whose implementation started in January, is aimed at providing transparent reporting about an insurer’s financial position and risk.

Jubilee said pre-tax earnings under the old standard, excluding the one-off gain from the sale of subsidiaries, would have grown by nine percent to Sh2.7 billion compared with the 16 percent fall to Sh2.4 billion under IFRS 17.

The underwriter’s insurance service expenses rose from Sh8.15 billion to Sh9.75 billion, leaving it with a net result of Sh3.4 billion compared with Sh4.37 billion in the previous half-year.

Jubilee will spend Sh2.25 billion, spread over the next five years, on digital transformation including investing in robotics, artificial intelligence and data analytics as it eyes customised covers and improved service delivery.

Read: Jubilee AGM okays Sh869.6m dividend pay

“Our digital transformation journey is not only about adopting technology but also a commitment to always put our customers’ needs at the heart of our business,” said Nizar Juma, chairman at Jubilee.

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