After issuing a profit warning in January this year, Britam holdings has reported a massive 79.5% decline in full year 2017 profit before tax of Sh 865.5 Million compared to Sh 4.2 Billion reported in the same period in 2016.
The diversified financial services firm has blamed a change in the regulatory requirement in accounting for liabilities for weighing down its earnings. The new law now requires insurance companies to change the basis of valuation of their long term liabilities from Net Premium Valuation (NPV) to Gross Premium Valuation (GPV).
In 2016, a one off change positively impacted its earnings by Sh 5.2 Billion.
Key Highlights from the 2017 Financials;
- Income from investment in property, which includes rental income, fair value movements in investment in property and investment in property funds, declined by 161% from 991 million in 2016 to a loss of Sh 607.3 Million.
- Total income grew by 24.5% to Sh 27.8 Billion as commissions grew slightly by 4% to Sh 744 Million.
- Revenues from its asset management business declined by 16% to Sh 848.4 Million
- Gross earned premium increased by 13.4% to Sh 24.1 Billion as net earned revenue grew by 15% to Sh 21 Billion.
- Net insurance claims increased by a huge margin of 1450% to Sh 12.5 Billion while expenses: grew 46% to Sh 27 Billion.
- Profit before tax declined by 80% to Sh 866 Million while net profit for the period declined by 79% to Sh 527.5 Million.
- The board declared a 17% increase in dividend payment to 35 cents per share compared to Sh 30 cents per share in the previous year.
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