Britam has increased its dividend payout by 17 per cent in a year when the insurer’s net profit dropped by Sh1.9 billion due to changes in accounting practice.
Britam, which has insurance, asset management and property development businesses, will pay a dividend of Sh0.35, up from Sh0.30 it paid last year.
The Nairobi Securities Exchange-listed firm posted a net profit of Sh527.4 million in the review period, down 78 per cent from Sh2.48 billion a year earlier.
The drop in profit is linked to the adoption of a new accounting practice that increased expenses on policy holders’ benefits by Sh3.8 billion while reducing that of 2016 by Sh2.7 billion.
“This one-off change impacted the 2016 earnings positively by Sh5.2 billion,” said Benson Wairegi, Britam’s Group Managing Director.
“The business fundamentals of the group remain very strong given we will share Sh756 million with our shareholders as dividends.”
The profit growth was largely driven by a 16.7 per cent increase in net insurance premiums to Sh20.2 billion and reversal of fortunes at the Nairobi bourse where the insurers posted a gain of Sh3.4 billion last year compared to a loss of Sh3 billion in 2016.
The firm owns shares other companies, which also generated dividends of Sh5.1 billion, up from Sh4.2 billion in 2016.
Britam wants to go big in the booming property sector and reduce its reliance on insurance business.