Insurance Firm Sanlam Kenya to Layoff Workers in Voluntary Retirement Plan

Insurance Firm Sanlam Kenya to Layoff Workers in Voluntary Retirement Plan

Sanlam Kenya Chief Financial Officer Kevin Mworia with Sanlam Life CEO Stella Njunge and Sanlam Kenya Group CEO Patrick Tumbo

Sanlam Kenya has announced a voluntary early retirement programme targeting staff aged 50 and above in its insurance business as part of the ongoing organisational turnaround strategies.

According to Sanlam Kenya Group CEO, Dr. Patrick Tumbo, the VER offer will be open to employees aged over 50 years and will close on October 4 with employees who accept the offer set to be released from the company’s employment effective October 31.

A reduction in operating costs through the adoption of digital systems among other options, Tumbo said, will have a positive effect on the company’s operations. “The VER scheme is one of the strategies we are deploying as part of our efforts to trim our total operating costs while gearing the company for enhanced operational efficiencies and agility.”

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The firm’s cost trajectory has been growing over the last 4 years from Kshs 1.4 billion in 2015 to the current Kshs 2 Billion in 2018 representing an 8% compounded annual growth rate while normalised revenue remained flat over the same period. 

Alongside the VER, management actions on business turnaround expected to provide more than Kshs 200million savings, including cost containment and aggressively growing revenue moving forward in the short and medium-term. 

Staff costs at Sanlam Kenya stood at Kshs 943 million in 2018 up from Kshs 746 million incurred the previous year representing a 26% growth.

The firm will also offer to the successful applicants’ compensation for unused leave days and in addition to this, the insurer is offering a 30 per cent loan rebate on the balance of any outstanding in-house staff loans. The exiting employees will receive pension benefits in accordance with organisational Pension Scheme Trust rules and Retirement Benefits Authority (RBA) regulations.