Sanlam Kenya, formerly Pan Africa Insurance Holdings, whose parent is Sanlam Group( South Africa), has noticed that its net profit for 2020 will drop by more than 25% compared to the prior year.
The firm joins a long queue of listed firms that have already issued a profit warning. Many of these firms cite a weak economic environment and disruptions associated with the COVID-19 pandemic for eroding their investment returns.
Its Board said in a statement that based on the data available with the board, the firm’s net profit for the period ended December 31, 2020 will reflect a decline compared to the prior-year earnings.
Sanlam Kenya background
Sanlam Kenya Group Plc is a locally incorporated and diversified financial services group listed on the Nairobi Securities Exchange(NSE).
Its subsidiaries include Sanlam Life Insurance Limited, Sanlam General Insurance Limited and Sanlam Securities Limited.
The firm’s issuance of a profit warning comes barely two months after GCR Ratings downgraded Sanlam Life Insurance Limited’s financial strength rating to A(KE), from AA-(KE), with a Negative Outlook.
Figures indicate that Sanlam Life Kenya enjoys an estimated market share of 6% in the Kenyan life insurance industry, serving over 78,000 policyholders under individual life and more than 235,000 under group life.
This subsidiary is Sanlam Kenya Group’s core operating entity contributing 63% and 87% of gross premiums and assets, respectively, as of 2019.
Listed Sanlam Kenya made a net loss of KSh99.1 million in the half-year ended in June 2020.
The firm cites adverse currency movements and the impact of the Covid-19 pandemic on the value of its assets for the depressed earnings outlook.
Led by Group CEO Dr Patrick Tumbo, the firm has undertaken various strategies to survive in a highly competitive business environment. Disruptions of COVID-19 has thus made the restructuring process at the listed firm much more tedious.
