Insurance Firms Record Losses After Decades Due to Sluggish Property Markets
Major insurance firms’ latest reports indicated losses and impairments for the year ending 2018. The losses have been blamed on poor performance in real estate and stock markets among other investments.
Britam Holding blamed their last year KSh2.3 billion loss on the harsh operating environment, compounded by investments in cash-strapped firms.
Housing Finance indicated many struggles in the real estate industry despite Britam having invested stake of 48.82% which they had acquired after buying out Equity Bank’s stake in 2014.
The investments conglomerate had bought the stake in the mortgage lender banking on “government plans to provide improved housing for citizens, the growth of the middle-income class and improved economic activities”.
The company faced a hard time trying to make things work something which saw its share price decrease to a 15-year low, hence Britam shedding KSh4 billion in paper gains as a result.
Britam has made a substantial investment on real estate in a bid to diversify its portfolio and shield shareholders from stock market volatility.
The company launched a landmark in Upper Hill known as Britam Towers, a KSh200 million commercial development a clear indication that the company has an extensive real estate portfolio.
UAP Old Mutual made a KSh518 million loss the very first time in a decade. According to the firm, the loss recorded was due to bad investments, restructuring and regulatory changes.
“We have had to let go of accounts we couldn’t price properly, and that has had an impact on the top line,” CEO Peter Mwangi told an investor briefing last week.
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