Jubilee in Sh2bn expansion to the DRC after profit growth last year
Jubilee Holdings has applied for a licence to set up a composite underwriting business in the Democratic Republic of Congo as a strategy to boost its earnings, which grew by nearly a fifth last year.
The Nairobi bourse-listed firm Monday announced an after-tax profit of Sh3.6 billion in the full-year period to December 2016, up from Sh3.1 billion a year earlier, and is now looking at new geographical markets for growth.
“The government in DRC has now opened applications for insurance companies to apply for licences. We hope to set up by end of year,” said Nizar Juma, chairman at Jubilee Holdings.
He revealed that Jubilee Insurance will invest more than Sh2 billion to open shop in the central African economy, where the capital requirement for each insurance class (short term and life assurance) is $10 million.
Jubilee Insurance entered the Kinshasa market last year where it is currently offering medical insurance cover under State-owned insurance monopoly Société Nationale d'Assurances (Sonas).
DRC has made amendments to its laws to allow privately-owned insurance and reinsurance companies set up in the economy.
The performance ranks Jubilee as Kenya’s most profitable listed underwriter, ahead of Britam’s Sh2.4 billion net profit, UAP Old Mutual (Sh826 million), Liberty (Sh628 million), CIC (Sh188 million), and Sanlam (Sh71 million).
Jubilee’s earnings growth for 2016 was attributed to growth in underwritten premiums in Kenya and its subsidiaries in Uganda, Tanzania and Burundi.
Gross premiums collected grew 11 per cent to hit Sh33.8 billion last year.
The underwriter’s commission payments to its agents and brokers surged by
Sh252 million to Sh3.3 billion in 2016.
Claims and benefits paid out increased 21 per cent to Sh13.9 billion from Sh11.5 billion in 2015.
Jubilee Holdings froze total dividend pay at Sh8.50 per share, the same rate paid since 2014.
The company sought to reward shareholders with a bonus issue in the ratio of one share for every 10 shares held, to mark its 80th birthday.
The insurance firm last had a bonus issue of the same ratio in 2014 fiscal year.