UAP profit hits Sh252 million on good returns from bourse
Insurer UAP Holdings has made a comeback into the profitability territory with net earnings for the six months to June hitting Kes252 million from a loss of Kes305 million last year on rising income and hold on costs.
In the half year, the Group’s total operating income rose to Kes13.1 billion from Kes9.6 billion in June 2020 with net premiums surging 33 per cent to close the period at Kes9 billion.
The Nairobi Securities Exchange listed insurer’s investment income surged by 121 per cent to Kes2.9 billion largely driven by recovery in the Kenya equities market.
In the period, the NSE All Share, NSE 25, and NSE 20 indices were up 14 per cent, 10 per cent, and 3 per cent respectively compared to down 17 per cent, 22 per cent, and 27 per cent in June 2020 owing to economic fallout sparked by Covid-19 pandemic.
In our core Kenya market, we have seen positive results in the Nairobi Securities Exchange indices and economic data as at June this year speaks to the initial stages of recovery, noted UAP Holdings in its half-year financial disclosures.
Read also: Britam swings into half-year profit as premiums rise
UAP’s total expenses and commissions rose marginally to Kes4.6 billion from a flat Kes4 billion with the Group lowering its finance costs to Kes698 million from Kes756 million last year.
Nevertheless, the underwriter’s net claims payable jumped by 46.9 per cent to Ksh.7.2 billion driven in part by increased medical claims relating to Covid-19 and what the firm called “hardening of reinsurance terms this year” that resulted in less recoveries.
The firm’s interest costs on borrowings were down 8 per cent to Kes698 million in what the firm attributed to “forex losses on the dollar denominated debt in the previous year.”
In the second half last year, UAP Holdings refinanced a dollar denominated debt thereby eliminating forex mismatch in its records.
The board of UAP Holdings has not recommended the payment of an interim dividend for the period, noted Chairman Vincent Rague and CEO Arthur Oginga.
