Sanlam invests Sh881m in life and general units


Sanlam Kenya CEO Patrick Tumbo and acting Sanlam General Insurance CEO Caroline Laichena during a media briefing in Nairobi on January 17. PHOTO | SALATON NJAU | NMG

Sanlam Kenya #ticker:PAFR invested an additional Sh881 million in its general and life insurance business, sending cumulative investment in the two subsidiaries to Sh2.28 billion.

The company’s latest annual report shows most of the investment (Sh643.14 million) went into the life business while Sh238 million was pumped into the general insurance unit.

Minority shareholders of Sanlam General, formerly Gateway Insurance, did not make any additional investments during the year, leading to further dilution of their stake as Sanlam gained.

“The additional investment in Sanlam General Insurance Limited led to an increase in Sanlam Kenya Plc’s shareholding from 67.54 percent to 75.12 percent,” the company says.

The latest share purchases translate to an additional 24.12 percent stake the Nairobi Securities Exchange-listed firm acquired the initial 51 per cent stake in the general insurer at Sh561 million in March 2015.

Sanlam has been raising its stake in the general insurer whose performance has been below expectations.

The firm added Sh121.7 million in the unit the previous year, closing with a shareholding of 67.54 percent.

For Sanlam, the increased investment in the subsidiary marks a re-entry into general insurance business which it exited in 2011 with the sale of its 39.9 percent stake in APA Insurance for Sh855 million.

The insurer already owns 100 per cent stake in Sanlam Life and Sanlam Securities. It also had total ownership of Sanlam Investments but it is no longer operational.

Sanlam Investment had negative net asset value as at the end of December last year, forcing Sanlam Kenya to recognise an impairment charge of Sh59.5 million in its books.

For the year ended December 2018, Sanlam General returned an underwriting profit of Sh40.9 million, similar to the previous year as gross written premiums rose 2.2 percent to Sh2.2 billion. It now wants to ride on aviation products to accelerate growth.

“We have now obtained the licence to write aviation risks in addition to our other product offering. The general business is well on track to become a major player in the general insurance market in Kenya,” says the firm.

While the short-term business showed improvement, long-term business returned a flat performance.