Despite facing challenges in an unpredictable business environment marked by a dimmer outlook on Botswana’s economic growth, Botswana Insurance Holdings Limited (BIHL) has reported resilience and growth in key areas. The financial services group indicated that its core operations remain strong, with notable progress across its segments.
According to BIHL’s unaudited consolidated financial results for the first half of 2024, the life insurance segment, which provides services through Botswana Life Insurance Limited, a subsidiary, experienced significant gains. The insurance service results saw a 21 percent boost, largely driven by higher earned premiums, particularly in the corporate line business. A reduction in negative renewal expenses and premium variances further contributed to this improvement, despite market fluctuations.
In the asset management segment, which includes Botswana Insurance Fund Management Limited (BIFM) and BIFM Unit Trusts, operating profit grew by 41 percent during the review period. This growth was supported by improved performance in underlying businesses. Excluding Zambian operations, the asset management business registered a 25 percent year-on-year increase in operating profits, while the Zambian arm benefited from favorable Pula/Kwacha currency movements and a one-off accounting adjustment.
The group’s profits were mainly driven by operating income, which rose 15 percent from the prior year, spurred by a substantial increase in assets under management (AUM). BIFM Unit Trusts recorded a notable improvement, with operating profit increasing 3.8 times compared to the same period in 2023.
“Total BIFM Group AUM increased by 16 percent, closing the period at P48.2 billion (June 2023: P41.4 billion), including Zambia’s P6.8 billion and BIFM Unit Trusts at P2.6 billion,” the Board reported.
Despite economic headwinds, BIHL remains well-positioned in terms of capital management and solvency, with required capital covered 6.8 times. The group factored this strength into its decision to declare an interim dividend to shareholders.
While the challenging economic climate poses difficulties for management in driving business growth, retaining clients, and delivering solid returns to shareholders, BIHL’s leadership remains optimistic. The company is focused on optimizing operations, improving efficiencies, and driving growth in specific market segments.
“By focusing on these areas, management expects to navigate the tough period ahead and work towards sustaining business success,” the Board said.
