Jubilee Holdings reports growth in profitMay 22, 2019
NAIROBI, Kenya, Apr 29 – Jubilee Holdings Limited has recorded an increase in its pre-tax profit to Sh5.16 billion in 2017 from Sh5.14 billion the previous year.
This is an increase of 4.8 per cent in its financial year 2017/2018 said to be greatly supported by a strong contribution from insurance results at Sh2.9 billion.
The growth in Gross Written Premiums to Sh34.8 billion from Sh33.8 billion in its 2017/2018 also contributed to the success.
The Group’s total assets increased by 9pc to Sh114 billion from Sh105 billion and total shareholders’ equity and reserves increased by 11pc from Sh23.6 billion to Sh26.1 billion.
On the investment front, the industry was affected by the decline in the stock market and lower yields on government bonds across the region, which resulted in subdued growth in investment income.
Last year is also when the industry started to feel the impacts of several years of pricing and risk management indiscipline, which has led to significant underwriting losses for most players in the market. This saw several insurers face Solvency Ratios below the legal minimum requirement.
Jubilee Holdings Chairman Nizar Juma expressed his joy of the companies despite operating in a challenging environment in the last financial year.
“I am pleased to report that Jubilee Insurance can stand up and be counted on for the strength of its balance sheet, reliability on payment of claims and a consistent and firm stand against corruption. Jubilee’s growth in Uganda and Tanzania has strengthened our market leadership and demonstrated our business resilience and agility to adapt to the market forces during tough times,” he said.
The company’s long term business posted a growth of 2pc to Sh14 billion, which included Individual Life growth of 19pc as the Group continues to implement the strategy to increase insurance penetration, particularly in Uganda and Tanzania where the insurance penetration is less than 1pc of GDP and where Jubilee’s life business grew by more than 50pc in each country.
The organization maintained its regional market leader in medical business and posted a growth of 4pc from Sh9.5 billion to Sh9.9 billion, with an underwriting profit of Sh753 million.
Jubilee Kenya outperformed and posted excellent underwriting results, whilst the industry, excluding Jubilee Kenya, posted an underwriting loss of Sh1.9 billion.
A foremost challenge for the medical business is the escalation in costs and lack of affordable and accessible medical care.
Jubilee estimates that Kenyans are paying at least 50% more for their medications due to over-prescription of branded drugs. We believe this is a National priority in order to lower the cost of healthcare so as to increase accessibility to those who otherwise could not afford good quality healthcare,” Juma said.
Its General business grew by only 1pc to Sh10.8 billion, partly a result of reduced regional spending on major infrastructure projects. However, countering market trends, the organization’s underwriting profits grew by 14pc to Sh609 million from Sh534 million with strong contributions from Uganda, Tanzania and Burundi operations.
The Jubilee Holdings Board has declared a final dividend of Sh8.00 per share for a combined interim and final dividend of Sh9.00 per share.