Sanlam Kenya has cut the net loss for the financial year ended December by 90 percent on improved performance from the short-term business that includes motor and medical covers.
The insurer’s net loss narrowed to Sh54.07 million from Sh542.36 million posted in the previous year, helped by reduced expenses in the general business — also called short-term insurance.
Net loss in the general insurance narrowed from Sh500.9 million to Sh151.66 million, helping the group in cutting losses. This was despite the life insurance business posting a drop in net profit from Sh641.99 million to Sh608.6 million.
The latest performance marks the third straight year for Sanlam Kenya to be in losses. The last net profit came in 2019 when it closed the year with Sh114.4 million.
“The board of directors is focused on building a resilient business going forward. A competitive customer value proposition, innovation, talent management and sustainability will continue informing the group’s strategy in the future,” said the firm.
Investors will have to endure the ninth straight year without dividends in light of the loss. Sanlam Kenya’s last dividend came in 2013 at Sh4.50 per share amounting to Sh432 million as net earnings hit Sh1.25 billion.
Sanlam shareholders have also seen their wealth in the Nairobi Securities Exchange-listed firm eroded from Sh8.64 billion in 2013 to the current valuation of Sh1.18 billion.
The group’s accumulated losses have now hit Sh1.15 billion from the previous year’s Sh998 million.
In the year ended December, Sanlam General’s total income had fallen from Sh3.48 billion to Sh3.17 billion as gross written premiums fell by about a third to Sh3.3 billion.
The general business, however, managed to cut the losses due to a 22 percent or Sh902 million fall in total expenses to Sh3.24 billion. The cut in costs was helped by a 52 percent fall in operating expenses from Sh1.03 billion to Sh488 million.
Sanlam, which in late 2019 announced voluntary early retirement, has not disclosed the reason behind the fall in costs.
Sanlam Life posted a drop in net earned premium from Sh7.37 billion to Sh6.35 billion, contributing to a 12.5 percent fall in total revenue to Sh7.78 billion.
However, a drop in net benefits and claims paid from Sh6.1 billion to Sh5.12 billion and a 13.5 percent fall in total expenses to Sh6.88 billion helped Sanlam Life to soften the fall in net profit.