The Board of Sanlam Kenya PIc has issued a profit warning to its Shareholders for the financial year 2021
“Based on our unaudited 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 decline compared to the prior year earnings.” Sanlam in the statement to shareholders
The insuarnce company attributed the decline to the prolonged Covid-19 pandemic which negatively impacted various aspects of the economy including their business. Both corporate and retail segments were adversely affected by increased premium default and claims from Covid-19 fatalities.
However, in response to the uncertainty, sanlam increased the level of premium debt provisioning to reflect the associated default risk while claims and related policy holder reserving was increased to ensure sufficient prudence.
In the latest Insurance Regulatory Authority (IRA) published a report for the 9 months ending 30 September 2021, Sanlam Insurance posted an underwriting loss of Shs 188.77 million
Net claims rose stood at Shs 142,09 million, its market share stood at 2 percent while claims ratio stood at 92 percent. In 2020, the firm reported an after-tax loss of Sh78 million representing a decline from the prior-year after-tax profit of Sh114million.
The insurance firm becomes the third one issuing a profit warning after Kakuzi and Limuru Tea which both projected 25 percent decline.
The Board of Directors at Sanlam said it continues to apply is efforts on innovation, expense management and digitalisation of key business processes to improve company efficiencies, customer offering, and sustainable shareholder returns well into the future.
