NAIROBI Aug 27 (Reuters) – Kenya’s Pan Africa Insurance Holdings posted a 131 percent jump in first-half pretax profit, boosted by growth in new business and a higher valuation for its equity and bond portfolio, it said on Monday.
Controlled by South African insurer Sanlam, Pan Africa said it was optimistic for the second half of the year due to easing inflation, but was wary of political uncertainty and insecurity, which could slow Kenya’s economic growth.
Interest rates in east Africa’s biggest economy have dropped steadily, tracking inflation which has tumbled to 7.7 percent from a high of about 20 percent late last year, which lifted the insurer’s income, the company said in a statement.
Pan Africa, which commands around 23 percent of the life cover business in the east African nation of 40 million people, said it made a first-half pretax profit of 220.5 million shillings ($2.6 million).
Gross premium income rose by 75 percent to 3.2 billion shillings in the period to the end of June.
The company said its life insurance business was bolstered by the acquisition of a few bulk annuity schemes.
Earnings per share climbed to 2.27 shillings from 0.76 shillings in the same period last year. The company said it would not pay a dividend, in line with its policy.
The company’s earnings were also lifted by the performance of its equity stakes on the Nairobi Securities Exchange where the main index is up 19.4 percent year to date.
“We expect this positive economic trend to continue in the second half of the year … the risks to achieving this growth remain political uncertainty, insecurity and the financial crisis in Europe,” it said in its statement.
($1 = 84.0000 Kenyan shillings)
(Reporting by Beatrice Gachenge; Editing by James Macharia and Mark Potter)
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