Sanlam Kenya has ended a four-year streak of losses to post a Sh1.05 billion net profit for the financial year ended December 2024, boosted by higher investment income.
The net profit marks a turnaround from the previous year’s net loss of Sh126.6 million and is the first profit since 2019 when net profit stood at Sh114.39 million. The Sh1.05 billion represents a record performance for the insurer.
Investment income, which includes money received from investments such as government securities, fixed deposits, and property, rose five times to Sh5.27 billion from the previous year’s Sh1.06 billion.
The increased investment income boosted Sanlam’s group performance despite its insurance service result—the difference between collected premiums and claims paid out as well as the related expenses—dropping to Sh643.52 million from Sh686.09 million.
“The earnings were driven by underwriting profit boosted by better investment income,” said Sanlam in the commentary accompanying the results.
Sanlam Life—the subsidiary that handles long-term insurance—saw its net profit rise 2.6 times to Sh1.37 billion from the previous year’s Sh533.9 million, as its investment income rose 5.9 times to Sh4.72 billion and insurance service result grew 9.9 percent to Sh653.1 million.
Sanlam General, which handles short-term risks such as motor, medical and fire insurance, saw its net profit rise 2.7 times to Sh337.4 million.
“The board of directors continues to focus on innovation on products and processes, improving capital efficiency, digitalisation of key business processes, and development of our people to grow the business sustainably, offering a competitive customer value proposition while providing the required return to its shareholders,” said the firm.
The group’s recovery started in the first half of the year, when it posted a Sh282.2 million net profit from a Sh171.9 million loss, as investment income more than quadrupled.
Despite bouncing back to profit, the insurer’s board has not recommended a dividend, making it 11 consecutive years without one.
The Nairobi Securities Exchange-listed firm is keen to retire most of its debt and shield itself from higher finance costs, which surged to Sh734.8 million in the year under review from Sh604.61 million in the preceding year.
Sanlam Kenya plans to raise Sh3.25 billion from its shareholders to settle a Stanbic Bank Kenya loan and save the company from liquidity challenges.
The insurer’s board approved a Sh3.25 billion rights issue on November 13 last year and plans to use the amount to save itself from a liquidity squeeze given that its entire Sh4.66 billion debt as of the end of December 2023 was set for maturity before mid-2025.
Sanlam wants to settle a Stanbic loan, which stands at about Sh3.1 billion, with the facility maturing at the end of this month. Another Sh1.08 billion loan that is maturing on May 5 next year is owed to Sanlam Emerging Markets— the intermediate parent company.
