Sanlam posts Sh78m loss on higher claims

Sanlam Kenya CEO Patrick Tumbo. FILE PHOTO | SALATON NJAU | NMG

By PATRICK ALUSHULA
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Sanlam Kenya has returned Sh78.2 million loss for the year ended December 2020, the second in nearly two decades, majorly on account of increased claims in an environment of Covid-19 disruptions.

The Nairobi Securities Exchange (NSE)-listed insurer posted growth in net written premiums but the bottom line was weighed down by 18.5 per cent rise in net claims and policyholders’ benefits to Sh5.731 billion.

The higher claims pushed the insurer from the Sh114.4 million net profit it had posted in the previous financial year.

This is the second time since 2003 for the Patrick Tumbo-led insurer to post a loss, extending investors’ wait for dividends amid falling share price on the Nairobi bourse during the financial year under review.

The insurer attributed the decline on Covid-19 disruptions on the local economy and foreign exchange rates which impacted negatively on the valuation of the group’s net assets.

Sanlam booked a Sh360.86 million fair value loss, down from a gain of Sh422 million in the previous year, underlining the impact of the weak foreign exchange rate.

The insurer’s subsidiaries —Sanlam life and Sanlam general— however generating Sh499 million and Sh139 million respectively as after-tax profits.

This came on the back of gross written premium growing 24 per cent to Sh8.69 billion driven by growth in long-term and short-term insurance business.