Britam MD Benson Wairegi speaks during the company’s Annual General Meeting in June. FILE PHOTO | NMG Britam Holdings sank into a half-year loss, hit by falling share values at the Nairobi Securities Exchange (NSE).
The financial services company saw the worth of its shares at the Nairobi bourse shed Sh3.2 billion in the six months to June, compared to a gain of Sh2.5 billion in a similar period a year earlier.
This wiped out the gains from the rise in revenue from insurance, which rose 8.5 percent to Sh14 billion, and led to a Sh1.6 billion loss from a Sh1.6 billion net profit a year earlier.
Britam managing director Benson Wairegi attributed the loss to the plunge in shares at the NSE in the wake of Covid-19.
The value of shares at the NSE dropped by Sh435 billion in the six months to June following widespread sell-off, notably by foreign investors, in the wake of Covid-19.
“This reflects the significant adverse impact of Covid-19 on the operating environment, particularly on the equities and property investments,” said Mr Wairegi.
“The group’s fundamentals remain strong and we are on track in the execution of our strategy and coupled with an improved operating environment the group’s performance outlook is positive.”
Insurance is seen as a growth area in Kenya, where less than 10 percent of the population has any form of cover.
“This increase is mainly attributed to the continued growth of our insurance revenue especially the international general insurance business which recorded an increases in premium of 34 percent,” said Britam.
The company also has operations in Uganda, Rwanda, Tanzania, South Sudan, Mozambique and Malawi.
It reckons that foreign units contributed 23 percent of the gross premium and a profit of Sh575 million.This lower share valuation look set to hurt Kenya insurers, highlighting the influence of the the stock market on the performance of insurance firms.