Operating expenses increased by 12.9 per cent to Sh8 billion, further depressing the bottom-line.
On the back of this performance, shareholders are set for another year without dividends during the annual general meeting slated in May.
Sanlam Kenya #ticker:PAFR has plunged into Sh1.97 billion loss on account of reduced income and increased expenses during the financial year ended December 2018.
The Nairobi Securities Exchange-listed insurer suffered impairment losses from debt notes and equity investments, further pushing it from a Sh53 million profit that had been booked in 2017.
“Several institutions in which the group’s long term insurer had invested came under financial distress which led to impairment of approximately Sh1.14 billion, primarily debt notes and equity in Kaluworks, Real People and Athi River Mining,” said the company on Tuesday.
Further, the company said it had to revise its reserving basis to reflect a more prudent basis as prescribed by Insurance Regulatory Authority.
This, it says, led to an additional Sh0.65 billion knock on earnings.
Future claims
Reserves for a policy refers to the amount of money an insurer needs to set aside to pay future claims.
Though these events are non-recurrent in nature, their overall impacts led to a net group consolidated loss after tax.
During the period, net written premium fell marginally by 0.83 per cent to Sh5.37 billion but total income plunged by 20 per cent to Sh5.9 billion on fair value losses.
Operating expenses increased by 12.9 per cent to Sh8 billion, further depressing the bottom-line.
On the back of this performance, shareholders are set for another year without dividends during the annual general meeting slated in May.
Based on unaudited half-year results, Sanlam’s board had issued a profit warning, blaming it on 100 per cent impairment of corporate bonds investments and slower economic growth.
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Note: The results are not exact but very close to the actual.
