• Net Insurance Service Result: The Group’s net insurance service result increased by 19% to P87 million.
• Revenue from Contracts with Customers: Revenue rose by 8% to P158 million, driven by robust performance across key business units.
• Life Insurance Business: Core earnings increased by 21% due to reduced negative renewal expense variances, a reduced negative premium variance and higher earned premiums on the corporate line.
• Assets Under Management (AUM): The Group’s AUM saw a significant increase of 16% to close the period at P48.2 billion.
GABORONE: Botswana Insurance Holdings Limited (BIHL) Group has announced its interim consolidated financial results for the six months ended 30 June 2024. The unaudited results reflect the Group’s robust financial performance, underpinned by strategic initiatives and sound management practices that continue to deliver value to shareholders and customers.
During the first half of 2024, the BIHL Group reported an increase in its net insurance service resultby 19%, reaching P87 million. This positive outcome highlights the Group’s commitment to delivering high-quality service and innovative solutions through its subsidiaries, Botswana Life and Bifm remain a key driver of this success. The revenue from contracts with customers also saw a significant rise, increasing by 8% to P158 million. This growth is attributed to the Group’s diverse range of financial products and services, which continue to meet the evolving needs of its clients.
The Bifm Assets Under Management (AUM) witnessed a substantial increase of 16%, closing the period at P48. 2 billion. This growth underscores the Group’s strong market position and the trust that clients place in its ability to manage and grow their financial assets. The increase in AUM also reflects the success of the BIHL Group’s investment strategies, which have been carefully calibrated to maximise returns while managing risk effectively.
The BIHL Group Chief Executive Officer, Catherine Lesetedisaid, “Our financial performance is a direct result of the hard work and dedication of our team, as well as the successful execution of our strategic plans. We continue to embrace digital transformation which has been a key driver of our success, allowing us to streamline operations and improve customer experience. We are particularly proud of our recent improvements on our systems and processes, which have not only boosted efficiency but also provided us with a competitive edge. Moving forward, our focus will be on leveraging these advancements to achieve sustainable growth and continue delivering exceptional value to our customers, stakeholders and the communities we operate in.”
The BIHL Group remains resolute and focused on its strategic priorities, including capital management, growth in core business segments, and delivering value to shareholders. The strong interim financial results for the first half of 2024 are a testament to the Group’s resilience and its commitment to maintaining its thought leadership position in the financial services industry.
In the life insurance business, Botswana Life has seen an increase in core earnings by 21% over the prior period. This improvement was driven by reduced negative renewal expenses variance, reduced negative premium variance, and higher earned premiums on Group Credit Life. Revenue was primarily driven by the expected release from the Contractual Service Margins (CSM) and the Risk Adjustment (RA), which together amounted to P84 million, compared to P92 million in the prior period.
In the asset management space, Bifm delivered a particularly strong performance during the period, with operating profit increasing by 41% over the same period last year. Operating profits, excluding Zambia operations, grew by 25% year-on-year, largely driven by a 15% increase in operating income, which was bolstered by a significant rise in Assets Under Management (AUM). Bifm’s strong performance was bolstered by retention of key mandates, acquisition of new mandates and its strong fee revenue.
The Bifm Unit Trusts, a key component of this segment, saw its operating profit rise by an impressive 3.8 times compared to the same period in 2023. Overall, Bifm ‘s AUM increased by 16% to P48.2 billion, compared to P41.4 billion in the same period last year, including Zambia’s P6.8 billion and BIFM Unit Trusts at P2.6 billion.
The Group’s solvency position remains robust, with required capital coverage at 6.8 times as of June 2024, compared to 7.8 times in June 2023. This strong capital base is a testament to BIHL’s prudent financial management and its focus on maintaining a healthy balance sheet.
During the period under review, the Group distributed P326 million in dividends, demonstrating its ongoing commitment to returning value to shareholders. In recognition of the Group’s solid financial performance, the Board has proposed an interim dividend of P188 million and a special dividend of P17 million. These proposed dividends, which are not subject to tax, further highlight the Group’s ability to generate sustainable returns for its shareholders.
“We have been proactive in embracing digital transformation and improving operational efficiencies, which has positioned us well to capitalise on emerging opportunities. Our focus remains on sustainable growth and providing exceptional value to our shareholders and stakeholders,” concluded Lesetedi.
