Jubilee Insurance #ticker:JUB has kept dividend unchanged despite a marginal 2.6 percent drop in net profit to Sh4 billion in the year to December.
The profit dropped from Sh4.12 billion on higher claim settlements and a lower return from associates. The insurer announced Sh8 dividend, keeping its total shareholder payout unchanged at Sh9 a share have made an interim pay of Sh1.
“The company will pay the dividend on or about July 24, 2020, to members on the register at the close of business on June 30, 2020. The payment of the dividend will be tabled at the Annual General Meeting for ratification. Details and Notice of the AGM will be issued in due course,” said Jubilee Insurance Group chairman Nizar Juma.
Although gross premiums were up nine percent to Sh29.1 billion an increase in claims from Sh15.9 billion to Sh19.7 billion weighed down the earnings.
Incomes from associate businesses also declined from Sh1.3 billion to Sh988 million during the period under review.
Insurance companies are facing challenging times, especially those in health insurance following the coronavirus outbreak that has affected 1,029 Kenyans with 50 succumbing to the disease.
Medical bills, which amount to more than Sh1 million per person may be challenging if the numbers are huge and the pandemic extends over a long time.
Although pandemics are not covered in insurance contracts, Kenyan regulators have pushed insurers to cater for the costs raising the danger of elevated claims this year in a medical sector that recorded an underwriting loss of Sh75 million last year.
Association of Kenya Insurers chief executive Tom Gichuhi said companies faced uncertain levels of stress if they continue to meet the bills without a plan and that a limit has to be set on the amount the industry can withstand.