Regional underwriter Liberty Kenya Holdings Plc has disclosed a Sh503 million gain from the sale of a majority stake in Heritage Insurance Tanzania, even as its half-year earnings dropped sharply on higher motor and medical claims.
The insurer completed the sale of its 60 percent stake in the short-term insurance unit in Tanzania earlier this year but had already distributed proceeds from the sale to shareholders via a special dividend of Sh0.50, which is set to be paid by August 24, 2025.
Liberty said the disposal of the unit had an accounting impact on its financial results to June 2025, but did not immediately disclose further details on the hit.
“The sale of Heritage Insurance Tanzania (HIT) was completed on April 4, 2025, and has been deconsolidated. The entity’s IFRS net asset value (NAV) at that date was attributable to the group is Sh520 million. Total proceeds were Sh503 million, net of the capital gains tax payable,” Liberty said in a statement on Tuesday.
The sale of the Tanzania unit helped Liberty raise its dividend last year by nearly threefold from Sh0.373 per share to a final distribution of Sh1, which included a Sh0.50 special dividend.
Heritage Tanzania was established after Tanzania liberalised its short-term insurance market in 1998, opening the way for Kenya's insurers such as Britam, ICEA Lion, and UAP to open shops in the neighbouring country.
Liberty chief executive officer Kieran Godden previously said that the firm intended to return all proceeds from the sale to shareholders as it had no immediate investment requirements.
“The amount of money is the net proceeds from the sale. We have returned it to the shareholders, which is good because they need cash in their pockets,” he said in a previous interview.
The absence of a fresh disposal this year, coupled with a weaker operating result in six months to June 2025, has dimmed the prospects of the underwriter equaling a similar return to shareholders this year.
The Group posted a 59 percent reduction in net earnings through the period to Sh260 million from Sh632 million last year on increased motor and medical claims.
Liberty’s net insurance service result before reinsurance contracts held, which represent the difference between premiums earned and claims paid, fell to Sh852 million from Sh1.36 billion previously.
Net insurance finance expenses also soared to Sh1.25 billion from Sh1.1 billion, placing a further strain on the Group’s bottom line.
The weaker outcomes from underwriter were, however, partly offset by improved investment income, which netted Sh2.07 billion from Sh1.98 billion previously.
The management of Liberty said it will focus on margin improvement and capital efficiency in the second half of 2025, as new business growth is expected to remain subdued.
“Even though higher claims reduced our earnings, our strong investment performance, good expense control, and solid capital base helped us stay resilient. We are now looking forward to launching fully digital life insurance solutions later this year, which will improve customer experience and strengthen our position in the market,” Kieran Godden said.
