Kenyan insurer Pan Africa 2011 net profit dips 24% on equity, bond revaluations.

By bne IntelliNews February 23, 2012
Kenya's Pan Africa Insurance Holdings posted a 24.8% yearly decline in net profit for 2011 to KES 443mn (EUR 4mn), hit by lower valuations of its bonds and equities portfolios, Business Daily reported. "The reduced profitability is attributable to significant unrealised losses for our marked to market bonds and equities portfolios," Pan Africa was quoted as saying. The insurer recorded value losses of KES 895mn last year, compared to value gains of KES 689mn in 2010. The NSE share index of the Nairobi Stock Exchange fell 28% last year. A rise in interest rates during the year which saw the 91 day Treasury bill climb to over 20% had an inverse impact on the value of government securities held by the insurer. Pan Africas gross written premium dropped to KES 3.65bn in 2011 from KES 3.83bn in 2010. The insurers performance was lifted by the sale of property and of its stake in APA insurance in mid-2011. The sale of Runda Houses is now complete and this together with other property transactions has helped cushion the losses from the NSE, the company said. The property transactions helped Pan Africa boost its other operating income rise to KES 664mn from KES 128mn. The insurers board will propose a dividend of KES 2 per share for last year, down from KES 3 a year earlier. The decline in profits was expected. From the underlying business it is still doing reasonably well, Business Daily quoted Eric Musau, an analyst at Standard Investment Bank, as saying. Controlled by South African insurer Sanlam, Pan Africa has a share of about 23% of the life cover business in Kenya.
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