UAP in Sh518m loss on increased claims : The Standard

Financial services firm, UAP Holdings, has posted a Sh518 net loss for the year to December 2018 owing to rising insurance claims and reduced yields from its property investments. The loss, the first in about a decade, represented a staggering 167 per cent decline in revenue from a net profit of Sh608 million in 2017. Group Chief Executive Peter Mwangi said at an investor briefing in Nairobi yesterday the firm’s performance was dented by a combination of factors, key among them increased claims and reduced returns from its property business in Kenya and South Sudan. “The reduction is largely attributable to a downward adjustment to the fair value of investment property in our Kenya business,” he said.

SEE ALSO :UAP makes Sh518 million loss in 2018

UAP joins other listed insurers - Britam and Sanlam - that have also posted losses. The harsh operating environment also led to a general business loss of 52 per cent last year from 45 per cent the previous year as the health business suffered a 70 per cent loss in 2018 compared to 66 per cent in 2017. This was reflected in its profit before tax which stood at Sh480 million last year from Sh1.3 billion in 2017. The decline was led by a reduction in insurance income where gross written premiums reduced slightly by 1.6 per cent to Sh18.8 billion last year from 19.1 billion previously. At the same, time net earned premium increased by 1.3 per cent to Sh15.5 billion from 15.3 billion in 2017. However, net claims payable increased 10 per cent to Sh10.4 billion last year from Sh9.5 billion in 2017 driven by a surge in motor vehicle claims from the Kenya and South Sudan businesses. In addition, investment income for the group was down 20.4 per cent owing to the poor performance of the equity market in Kenya.  “The Nairobi Securities Exchange 20 Share Index was down 23.5 per cent in 2018 thus negatively impacting the group’s holdings on the bourse with unrealised losses on equities amounting to  Sh478 million,” said Mr Mwangi. Additionally, the group suffered a Sh604 million loss from a valuation write-down of its property in South Sudan. “Our South Sudan property valuation was impacted by subdued occupancy and letting levels given the tough operating environment which resulted in a write-down on the asset in for the year 2018,” he added. The group also parted with Sh780 million owing to failed investments in corporate bonds issued by Athi River Mining (ARM) and lost deposits by the failed Tanzania’s Bank M.

Related Topics

UAP HoldingsBritamSanlam