Jubilee Holdings Limited (JHL), East Africa’s leading insurer today announced its full year 2016 performance figures, which saw the group’s profit after tax grow by 17.8% to Ksh 3.68 billion (profit before tax grew to Ksh 4.6 Billion from Ksh 4.1 billion).
Gross Written Premium (GWP) and Contributions grew by 12.1.% in 2016, driven by an outstanding 43.7% growth in Group & Individual Life business and 15.9% in the Medical segment; General insurance growth at 4.5% was impacted by both intense price competition and delays in expected infrastructure investments across the region. As a result, Jubilee has retained its position as the number 1 insurance group in East Africa with market leading positions in Kenya, Uganda and Tanzania.
Jubilee’s total asset base as at 31st December was Ksh 90.6 billion, a 9.9% growth compared to the end of 2015, which is the highest in the Industry. The Group has also recorded a growth in shareholder earnings per share from Ksh 42.7 to Ksh 50.0, a growth of 17.1%.
Speaking to the media following the JHL Board meeting, the Group Chairman, Mr. Nizar Juma said that the company had produced solid results, despite a challenging environment, that saw four of the six listed insurance firms issue profit warnings.
“We have weathered the tough environment to post the best results in this sector with all business segments and operations posting positive growth. Against this background I am especially pleased to report that Jubilee increased its General insurance underwriting profit in 2016 with a 90% combined ratio and our 2 new life companies in Uganda and
Tanzania achieved positive net results, in only their second full year of operation” Mr. Juma said.
Even as the Nairobi Securities Exchange NSE 20 index fell by 21%, a second consecutive year of decline (2015: 22%), Jubilee Holding’s share price stayed above Sh450, and in fact appreciated slightly in the year, showing the investor confidence that the company continues to enjoy. Mr. Juma added that the confidence is due to the firm’s stable topline and consistent profit before tax over the years. Since listing in 1984, JHL has always declared dividends and has never declared a lower dividend than the previous year.
JHL is also pleased to advice that all its insurance subsidiaries across the region are well capitalized and that the Kenyan company is fully, and comfortably, compliant with the Risk Based Capital measures introduced at the end of 2015, with some of the highest Capital Adequacy Ratio’s in the industry. Jubilee is well positioned to meet the requirements of increasingly strict solvency regimes across East Africa, which will be positive for both the industry and policyholder protection.
JHL has diversified its investments to reduce the risk of volatility from stock market movements in the recent years. This strategy has included diversification into investments in the energy sector, such as Tsavo power and Bujagali that are giving returns in dollar terms. This investment strategy has proven sound during a period of market volatility for the benefits of both JHL’s shareholders and pension and life clients and the Group will continue to pursue an investment strategy that is long-term in its outlook.
Insurance fraud remains of serious concern to industry players and Jubilee is tightening its controls through dedicated anti-fraud units. “We are at the forefront in fighting fraud as it is a growing threat to the insurance industry and which increases premium costs for all our
policyholders. Jubilee is investing in fraud detection systems and will continue to take rigorous action to protect all stakeholders whenever industry fraud is detected”. Mr. Juma said
Jubilee Holdings, like other insurance firms is struggling with rapidly rising medical inflation coming from increased pharmaceutical costs, outpatient consultation fees and bed charges.
“We’ve had very positive discussions with providers to encourage doctors to offer patients affordable branded generic drugs as opposed to branded drugs, which are not inferior in quality and which consumes most of the medical cover that we offer patients. In addition to allowing increased coverage within the patient’s medical limits, this will also help in minimizing annual increases in the premiums charged to our clients,” Mr. Juma said.
Data from IRA shows that thirteen of the eighteen firms offering medical covers posted losses in the third quarter of last year, meaning that they paid more claims than the premiums they received.
Jubilee is committed to developing the insurance sector in East Africa, which still has very limited penetration, and a strategic focus in 2017 will be on building distribution capacity to make Retail products more easily accessible to consumers across all markets in the region. By developing agency networks, bancassurance networks with partner banks and increasingly online and mobile product offerings, Jubilee intends to grow the Retail segment across key product lines, such as Motor, Medical and Life protection and savings. Jubilee is also committed to developing products for the expanding middle and lower income segments so that they have opportunities to purchase insurance protection at affordable premiums through digital platforms.
JHL continues to invest in technology to support its growth strategies and has established a Board Innovation Committee to embed innovation into
Jubilee’s core DNA and ensure constant focus on change and renewal of business processes and product offerings. The company has embarked on aggressive Digital Channels development programs and invested heavily in technology and expertise in order to be the market leader in technological channels of the future.
As part of its 80th anniversary celebrations, Jubilee Holdings has embarked on various activities to celebrate this milestone. JHL will host several medical camps in the region to cater to last mile medical interventions for the vulnerable in our society through provision of artificial limbs, ear and eye operations and in addition will work with Aga Khan Hospital to provide cardiology and oncology services to those patients who need these services but cannot afford to pay for them. The company is also spearheading the Live Free painting competition, open to all government sponsored primary schools that will offer secondary school scholarships to pupils who produce outstanding paintings. JHL is also supporting the Blue Company Project, a strong initiative that aims to help stamp out corruption in the private sector.
Jubilee Holding’s ten-year financial journey has seen the shareholder funds grow fivefold from Ksh3.6 billion a decade ago to Ksh19.9 billion last year. Equally, its assets currently stands at Ksh90.6 billion from Ksh17.9 billion ten years ago. In 2015, the Group paid Ksh560 million as dividends to shareholders, a 193% increase over a ten year period, with the earnings per share growing fivefold over a similar period to the current Ksh50.0 per share.
Jubilee Holdings declared a final dividend of Ksh 7.50 for a combined interim and final dividend of Ksh 8.50 per share.
In addition to the final dividend, the Directors recommend for approval at the next Annual General Meeting, a bonus issue of 1 share for every 10 shares held for a total of 6,588,460 million shares to commemorate
the milestone of the 80th anniversary of the company that will be reached on August 4th, 2017. This represents a value of over Ksh 3 billion at the current market price per share of Ksh 473.
About Jubilee Insurance
Jubilee Insurance was established in August 1937, as the first locally incorporated Insurance Company based in Mombasa. Today, Jubilee Insurance has spread its sphere of influence throughout East Africa to become the largest Composite insurer in the region, handling both long-term and short-term insurance, with over 1.1 million clients spanning Kenya, Uganda, Tanzania, Burundi and Mauritius. It has grown to become the largest provider of medical insurance across East Africa and provides medical insurance to many of the region’s blue chip companies. It is the only ISO certified insurance group that has cross listed on The Nairobi Securities Exchange (NSE), Dar es Salaam Stock Exchange (DSE) and Uganda Securities Exchange. Its regional offices are highly rated on leadership, quality and risk management and have been awarded an AA- in Kenya and Uganda, and an A+ in Tanzania by Global Credit Rating.
For Further press information, please contact the undersigned:
Victoria Miguda-Bonyo l Head of Corporate Communications
Cell: +254 702 957916