Sanlam Kenya has delivered a remarkable turnaround for the year ending December 2024 with a net profit of Sh1.05 billion. This is after a loss of Sh126.6 million in the previous year and the company’s first profit since 2019 when it made a modest Sh114.39 million.
The impressive result is largely due to a fivefold increase in investment income which went up to Sh5.27 billion from Sh1.06 billion. The windfall from government securities, fixed deposits and property investments provided a big cushion to the group’s overall performance despite a drop in the core insurance service result.
Sanlam’s insurance service result which is the difference between premiums collected and claims paid out dipped to Sh643.52 million from Sh686.09 million. The company attributed the underwriting profit boosted by the stronger investment returns for the overall performance.
Breaking down the divisions, Sanlam Life which handles long-term insurance saw its net profit rise 2.6 times to Sh1.37 billion driven by near sixfold increase in investment income. 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.
Despite the strong comeback the company has not declared any dividends for the 11th year in a row. The company however said it is focused on innovation, digitalization and improving capital efficiency to drive sustainable growth while managing its debt.
As part of its recovery plan Sanlam is seeking to raise Sh3.25 billion from a rights issue to settle maturing loans including Sh3.1 billion loan from Stanbic Bank Kenya which is due for repayment this month.
While the company has made significant progress, its board is still focused on liquidity challenges having allocated funds to pay off Sh4.66 billion debt that will mature before mid-2025. This financial recovery has boosted investor confidence and sets the stage for further strategic moves to consolidate its position in the competitive insurance industry.