In Summary: Sanlam PLC blames the long-running Covid-19 outbreak, which had a devastating impact on the economy.
Written By Written By Gerald Gekara | |
Sanlam Kenya PLC’s Board of Directors has given a profit warning to its shareholders for the fiscal year 2021.
The insurance company blamed the drop on the long-running Covid-19 outbreak, which had a severe influence on several parts of the economy, including their revenue.
Increased premium default and claims from Covid-19 fatalities harmed both the corporate and retail businesses.
“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
Sanlam increased premium debt provisioning to reflect the associated default risk, while claims and related policy holder reserving was increased to provide sufficient prudence, in reaction to the uncertainties.
Sanlam Insurance reported an underwriting loss of Shs 188.77 million in the latest Insurance Regulatory Authority (IRA) report for the nine months ending 30 September 2021.
Net claims increased to Shs 142,09 million, with a market share of 2% and a claims ratio of 92 percent.
In 2020, the company recorded an after-tax loss of Sh78 million, down from a profit of Sh114 million the previous year.
After Kakuzi and Limuru Tea, which both forecasted a 25% drop in profits, the insurance company is the third to issue a profit warning.
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