Sanlam Kenya Plc earnings for the fiscal year 2020 hit a record low and is expected to languish near those levels this year, the insurer says.
“Based on our un-audited end of year financial results and information currently at the Board’s disposal, we wish to report that our projected net earnings after tax for the period ended 31st December 2021 will reflect a declining compared to the prior-year earnings.”
This means, its losses will decline further, below the Ksh 78 million that was reported.
Similarly, its half-year earnings dipped KSh291.8 million up from a KSh99.1 million loss posted in the same period in 2020.
The firm attributed the loss to provisioning on settling high claims and the one-off forex losses.
“The prolonged Covid-19 pandemic negatively impacted various aspects of the economy including our business. Both corporate and retail segments were adversely affected by increased premium default and claims from Covid-19 fatalities,” Dr John Simba, the insurer’s Board Chair said.
As a result of the pandemic, the business increased the level of premium debt provisioning.
“The provisioning approach applied by the business is the key contributor to the decline in earnings and is expected to reverse as the operating environment improves over the next financial year.”
Sanlam posted an underwriting loss of KShs 188.77 million as per the Insurance Regulatory Authority (IRA) report for the 9 months ending 30 September 2021. In the period, net claims stood at KShs 142,092, its market share at 2 per cent while the claims ratio stood at 92 per cent.
The insurer becomes the third listed firm to issue a profit warning after Kakuzi Plc and Limuru Tea.
