- Tsaone Segaetsho
Botswana Stock Exchange-listed Botswana Insurance Holdings Limited (BIHL) Chief Executive Officer (CEO) Catherine Lesetedi has acknowledged that the group experienced challenges in the year 2023, referencing the Zambian business operation as the main detractor as the group closed the year with a significantly lower operating performance, owing to a once-off positive accounting adjustment recorded in the previous year.
The BIHL Group is divided into two principal business areas, namely life insurance, through the full subsidiary Botswana Life and asset management through Botswana Insurance Fund Management Limited (Bifm) and Bifm Unit Trusts.
Lesetedi was looking at the 2023 performance where profit before tax from insurance operations increased by 136 percent compared to the prior year. According to Lesetedi, the key driver for the increase in profitability is a 326 percent increase in investment returns earned during the year on the back of positive fair value gains across assets backing insurance contracts and International Financial Reporting Standards (IFSR) 9 investment contracts.
The BIHL directors said the insurance service result has remained stable compared to the prior year, for both insurance revenue and insurance service.
The Bifm Group’s operating profit for the year grew by 1 percent over the previous year’s operating profits, registered 20 percent year-on-year growth. This growth in profits, excluding the Zambian operations, was mainly driven by operating income which closed 13 percent higher than the year before, driven by a substantial increase in assets under management (AUM).
“Bifm’s contribution to the group performance continues to grow and impact results positively, recording an operating profit improvement of 15 percent against the prior year. Total Bifm AUM increased by 16 percent to close the year at P44.5 billion from P38.5 billion in 2022, including Zambia’s P5.9 billion and Bifm Unit Trusts at P2.6 billion,” said BIHL Chief Financial Officer, Kudakwashe Mukushi, while presenting the group’s financial results in Gaborone this week.
He said 2023 marks the first year in which Botswana Life’s annual financial statements are being presented in accordance with the new IFRS 17 insurance contracts standard.
“Insurers are required to present comparative financial information for the year immediately preceding the date of initial application to enable meaningful comparison, therefore, the 2022 results previously published have been restated in accordance with the new standard,” said Mukushi.
On capital management and solvency, the group remains well positioned and this was taken into consideration by the board when resolving to declare a final dividend, he added.
The directors, led by renowned BIHL economist Keith Jeffries, said it was resolved to award a final dividend of 110 thebe per share (not subjected to tax). The declaration date of dividends was 25 March 2024, while the Ex-dividend date 15 April 2024 with record date being 17 April 2024. According to BIHL directors, dividends will be paid on 25 April 2024.
