Kenya’s UAP Holdings Limited has posted its first loss in about a decade. The insurer posted a Sh518 million ($5.18 million) loss for the financial year ended December 2018.
UAP Holdings now joins the group of insurers whose earnings have taken a beating in recent years.
The loss is a 166 percent decline in performance from the Sh608 million profit that was reported in the previous financial year.
Group CEO Peter Mwangi has attributed the loss to challenging business conditions witnessed last year.
“Performance was impacted by a tough operating environment in Kenya and the wider region.
"We have had to let go of accounts we couldn’t price properly and that has had an impact on the topline,” said Mr Mwangi in a press statement.
As a result of the poor show on the market, UAP investors will not receive any dividend, unlike last year when the board declared Sh1.70 per share amounting to Sh359 million.
The combination of increased claims and reduced investment returns also affected the returns. Gross written premium reduced by 1.8 per cent to Sh18.7 billion as the firm dropped non-performing accounts.
Net claims payable rose by 10 per cent to Sh10.38 billion.
“The increase was largely driven by more prudent reserving in our short-term insurance businesses, claims deterioration in South Sudan where inflation remains high and increased reserves in our life business,” said Mr Mwangi.
UAP now becomes the third insurer on the Nairobi Securities Exchange (NSE) to post a loss. Britam registered a loss of Sh2.2 billion while Sanlam posted Sh1.97 billion loss.
All the three insurers issued a profit warning as so did Kenya Re whose profit dipped by 36.4 per cent to Sh2.27 billion.
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