Nairobi, 29th April 2019 – East Africa’s largest insurance group, Jubilee Holdings Limited (JHL) has once again delivered excellent results in a year that has been exceptionally challenging for the regional insurance industry. The Group recorded growth in Gross Written Premiums (GWP), insurance results and Profit Before Tax, against a market backdrop in which the results of many of Jubilee’s peers deteriorated due to a combination of intense competition in major lines of business and declining investment returns.
JHL’s overall GWP, including Deposit Administration contributions, increased to KShs 34.8 billion (2017 – KShs 33.8 billion), whilst pre-tax profit increased 4.8% to KShs 5.41 billion (2017 – KShs 5.16 billion), supported by a strong contribution from insurance results at KShs 2.9 billion (2017 – KShs 2.7 billion).
The Group’s total assets increased by 9% to KShs 114 billion from KShs 105 billion and total shareholders’ equity and reserves increased 11% from KShs 23.6 billion to KShs 26.1 billion. On the investment front, the industry as a whole was affected by the decline in the stock market and lower yields on Government bonds across the region, which resulted in subdued growth in investment income. 2018 was also a year when the industry started to feel the impacts of several years of pricing and risk management indiscipline, which has led to significant underwriting losses for most players in the market. As a consequence a number of insurers face Solvency Ratios below the legal minimum requirement.
“Whilst 2018 was a challenging year for the insurance industry across the region, but particularly in Kenya, the persistent undisciplined mismanagement and poor insurance practices within the industry over the years have now reached a stage where the industry includes many companies that are in a state of crisis. I am pleased to report that Jubilee Insurance can stand up and be counted on for the strength of its balance sheet, reliability on payment of claims and a consistent and firm stand against corruption. Jubilee’s growth in Uganda and Tanzania has strengthened our market leadership and demonstrated our business resilience and agility to adapt to the market forces during tough times. Our eighty years of experience, lowest expense ratio in the industry and conservative approach to investments has allowed us to post the impressive results that we have released today” said Mr. Nizar Juma – Chairman, Jubilee Holdings.
JHL’s long term business posted a growth of 2% to KShs 14 Billion, which included Individual Life growth of 19% as the Group continues to implement the strategy to increase insurance penetration, particularly in Uganda and Tanzania where the insurance penetration is less than 1% of GDP and where JHL’s life business grew by more than 50% in each country.
JHL’s maintained it’s regional market leadership in medical business and posted a growth of 4% from KShs 9.5 billion to KShs 9.9 billion, with underwriting profit of KShs 753 million (2017: KShs 878 million). Once again Jubilee Kenya outperformed and posted excellent underwriting results, whilst the industry as a whole, excluding Jubilee Kenya, posted an underwriting loss of KShs 1.9 billion. In Kenya “we continue to develop systems to monitor and track medical services rendered and the quality and cost of services received using biometric identification of members and electronic and real-time transmission of claims. With this enhanced use of technology, it makes it more difficult for fraudsters to falsify claims” commented Dr. Kipng’etich.
A foremost challenge for the medical business is the escalation in costs and lack of affordable and accessible medical care. “We continue to make every effort on cost reduction by challenging service providers to justify price increases, standardize payments for equivalent services from service providers, and to champion the use of quality generic drugs which are just as effective as branded drugs for a fraction of the cost. JHL estimate that Kenyans are paying at least 50% more for their medications due to over-prescription of branded drugs. We believe this is a National priority in order to lower the cost of healthcare so as to increase accessibility to those who otherwise could not afford good quality healthcare” said Mr. Nizar Juma.
JHL’s General business grew by only 1% to KShs 10.8 billion, partly as result of reduced regional spending on major infrastructure projects. However, countering market trends, JHL’s underwriting profits grew by 14% to KShs 609 million from KShs 534 million with strong contributions from the Uganda, Tanzania and Burundi operations. “JHL has continued to have a strong focus on the quality of its insurance portfolio and with improved customer focus, coupled with strong systems and controls within the business, we are confident this will yield further improvement in results over time” stated Dr. Kipng’etich.
Technology and innovation remains a key priority for JHL. The Group has enhanced its chatbot “Julie” – Jubilee Insurance Live Intelligent Expert, which is the first AI-powered chat assistant of her kind in the insurance industry in East Africa and she now assists with various insurance queries on a daily basis.
During the year, the Boards of JHL and Jubilee Insurance Kenya approved the split of the Kenya subsidiary into three separate companies specializing in Medical, General and Life businesses respectively. The Insurance Regulatory Authority (IRA) has encouraged the operation of short-term and long-term companies as separate entities as a matter of public interest.
On Corporate Social Responsibility, in 2018, continued with 80th Anniversary projects namely the Live Free Painting, School Renovation, Jaipur Foot, Ear Operations, and Eye project.
Jubilee Holdings Board has declared a final dividend of Ksh 8.00 per share for a combined interim and final dividend of Ksh 9.00 per share.