This archive report was first published on 21 August 2019.
On August 21, 2019, Sanlam Kenya announced a remarkable turnaround in its financial performance, posting a net earnings of Sh639 million for the first half of 2019.
This impressive feat comes after the company suffered a significant loss of Sh1.5 billion in the same period the previous year, largely due to bad investment decisions.
Sanlam's treasury bond and equity portfolio played a crucial role in boosting earnings, increasing from Sh41 million to Sh1.9 billion. This, combined with a slight growth in insurance incomes from Sh2.4 billion to Sh2.7 billion, contributed to the company's improved financial health.
Additionally, lower claims of Sh1.9 billion, down from Sh2.4 billion, also supported the company's profits.
Sanlam's group chief executive officer, Patrick Tumbo, attributed the company's success to the impressive market value gains on its equity and treasury bond portfolios, which raised non-insurance incomes to Sh1.9 billion compared to Sh41 million in the same period last year.
Sanlam had previously taken a beating due to bad investments, including writing off bonds owed by Kaluworks (Sh169 million), Athi River Mining (ARM) Cement (Sh574 million), and Real People Kenya (Sh398 million), as well as extending money to troubled Nakumatt Supermarkets.
The company has since stepped up efforts to recover the cash, totaling Sh2.2 billion, and has vowed to keep off corporate bonds considered 'highly toxic' investments until the law governing the corporate bond market is strengthened.
Sanlam's core insurance revenues grew by 17 percent to Sh3.65 billion, while its total income derived from net earned premiums, investment, and miscellaneous income improved by 84 percent to Sh4.6 billion.
