The BIHL group stays resilient, performing well in uncertain times

Despite the uncertainty of global and local markets, Botswana’s leading financial services Group, the Botswana Insurance Holdings Limited (BIHL) Group, has demonstrated great resilience and tenacity, as revealed in the financial results for the full year ending 31 December 2020. The performance of the Group was shared before key stakeholders at its annual engagement, cognisant of the marked changes brought on by COVID-19, and yet delivering truly pleasing results for shareholders and stakeholders alike.

According to the results shared, the Group remains well-positioned in terms of capital management and solvency. This was taken into consideration by the Board when resolving the final dividend. The Directors have thus proposed a final dividend of P184 million, net of tax, as compared to P166.6 million in the same period the prior year.

Said Catherine Lesetedi, CEO of The BIHL Group, “Despite the prevailing environment, the Group and its Subsidiaries have remained formidable throughout the period. Our Strength in Numbers empowers us as a financial services group to better serve our people, creating impact as we work to engineer legacies even as we build our own. It has been the resilience of our people, our clients and customers, and indeed our culture and community that has allowed this business – indeed aided this business – to progress to where we are today. We have successfully returned strong shareholder value and continued to introduce new solutions in line with our diversification agenda. This has been seen through new offerings to the market through both Botswana Life and Bifm. BIC too continues to make its mark and impact the lives of customers every day.”

The ecosystem in which the Group has performed should not be ignored. Data released showed that the Botswana economy contracted by 24% in Q2 2020 with the mining sector the hardest hit contracting by 60.2% year on year. The local economy contracted by a further 6% over the Q3 2020, a notable improvement given the post-lock-down pick-up in economic activity. In spite of this, the Group has delivered a robust set of results.

Key financial performance highlights of the BIHL Group are as follows:

Revenue

• Net insurance premium income increased by 11% to P2.9 billion • Recurring premium income increased by 8% to P1.6 billion • Fee revenue increased by 11% to

P109 million • Value of new business decreased by 18% to P129 million

Assets Under Management

• Assets Under Management increased by 4% to P30.3 billion

Earnings

• Operating profit increased by 4% to P393 million • Core earnings increased by 4% to

P426 million • Profit attributable to equity holders increased by 22% to P532 million

Solvency

• Business is well capitalised, required capital for the group subsidiaries is covered 6.3 times (Dec 2019: 7.1 times)

Embedded Value

• Embedded Value increased to

P4.78 billion. (Dec 2019: P 4.65 billion) • Return on Group Embedded

Value was flat 13% (Dec 2019: 13%)

The Board has confidence in the Group’s ability to maintain dividends at this level while ensuring that its capital position remains solid and aligned with future capital requirements whilst sustaining healthy levels of Return on Group Equity Value.

Concluded Lesetedi, “We would like to thank all our Clients, Brokers, Agents, Staff and other Stakeholders for the on-going partnerships and support and look forward to serving them in the future. Without their efforts and support, we would not be the Group of businesses that we are today, not as geared, capable and impactful in our efforts to engineer legacies for and with Batswana. Indeed, in this time of uncertainty, our resilience remains key, as a business and as a community. Central to this is our ability to collaborate, unite, and reflect the very tomagano, botho and maatla that remains rooted in our culture. This is the basis of our Strength in Numbers, and the foundation against which we head into the future, agile and ready for the next chapter in our story.”