This was matched with equal vigour by a fierce determination to grow and create greater value for shareholders and indeed all Batswana.
Notably, Botswana Life and the BIFM Group both contributed to strong revenue lines for the Group, with eroded profit lines only as a result of increased mortalities and claims brought on by the COVID-19 pandemic. BIHL Group CEO, Catherine Lesetedi said, “We are pleased with the performance of the group as a whole, for though profits are notably lower than the year prior, we also know this was in no way a result of poor performance.”
Revenues were strong, with net insurance premium income increasing by 7 percent to P3.1 billion, recurring premium income by 15 percent to P1.9 billion, fee revenue by 17 percent to P128 million and value of new business by 37 percent to P176 million. “The erosion of profits is due to the increased morbidities and claims, which is to be expected, indeed, we are comforted by the Group’s ability and resolve in standing by our commitment to pay out claims as we have done. We continue to manage the businesses prudently to ensure continued delivery of our strategy and returns to shareholders and the wider stakeholder community,” Lesetedi said.
Botswana Life’s income for the year grew despite the headwinds largely attributable to COVID-19 pandemic and slower than expected economic recovery. Premium income grew by 7 percent from P2.9 billion in 2020 to P3.1 billion and net recurring premium income grew 16 percent from P1.58 billion to P1.83 billion. This line represents a sustainable source of profits in the long term, the Group notes. Total new business grew 42 percent with most income lines showing a recovery from 2020. The value of new business, which represents the present value of future profits from new business premiums written during the period, grew by 37 percent compared to prior year due to higher sales volumes for some retail and corporate business portfolios and a shift towards a more profitable mix of new business.
The BIFM Group yielded a strong set of results, as operating profit increased by 12 percent compared to the prior year. This good performance is attributable to the growth in Assets Under Management (AUM) of 18 percent reflecting the goodwill that the company continues to build with its clients. The Zambia business, on the other hand, realised a decline in operating profit compared to the prior year mainly due to a decline in performance fees income compared to the prior year and the depreciation of the Zambian Kwacha against the Botswana Pula. Total AUM for the Bifm Group increased by 19 percent to close the year at P36 billion, including Zambia’s at P5.2 billion and Bifm Unit Trust at P1.7 billion.
Share of profits of Associates and joint ventures increased by 19 percent with the main Associates being Funeral Services Group, Letshego Holdings, Botswana Insurance Company and Nico Malawi Holdings. Looking ahead, the Group said its value proposition remains sound. Risk mitigating actions will continue, including driving profitable topline growth to ensure the business can navigate the current pandemic while delivering much-needed support to policyholders, the company said.
Concluded Lesetedi, “The focus on collaboration within the group has yielded pleasing results and management will continue to drive internal synergies as well as mutually beneficial partnerships with key clients and partners. We thank all our Clients, Brokers, Financial Advisors, Staff and other Stakeholders for the ongoing partnerships and support and look forward to serving them in the future.” The Board has proposed a final dividend of P200 million net of tax (Dec 2020: P184 million net of tax).