Liberty Kenya Holdings Ltd (LBTY) has warned higher risk claims in 2021 could dent its earnings for the year ended December 2021, as the coronavirus pandemic hammered its bottom line.
The insurer says its consolidated earnings after taxation for the fiscal year will likely be lower by at least 25 per cent than the audited earnings after taxation reported for the same period in 2020.
“The impact o Covi-19 has resulted in significantly higher risk claims in 2021 negatively impacting the consolidated financial results,” Mr Philip Odera, Board Chairperson Liberty Kenya said in a public notice.
In 2020, it posted a 2 per cent decline in profit after tax to Ksh 676 million from Ksh 690 million recorded in 2019. The decline in income was attributed to the economic hardship that was brought about by the onset of the COVID-19 pandemic.
During the period, its assets increased by 3 per cent to Ksh 39.30 billion compared to the Ksh 38.2 billion recorded during the same period in 2019.
In addition, it posted a 2 per cent growth in gross premiums to Ksh 11.2 billion compared to Ksh 10.96 billion recorded in 2019. Its total income from net insurance premiums, investments, interest payments, and fair value adjustments dropped to Ksh 9.9 billion in 2020 from Ksh 11.5 billion in the previous year.
Liberty Kenya is listed on the Nairobi Securities Exchange under the Insurance sector. It is the holding company for Heritage Insurance Company Kenya Ltd and Liberty Life Assurance Kenyan Ltd. The insurance firm is a subsidiary of Liberty Holdings which is also part of the Standard Bank Group.
Liberty Holdings plans to increase its ownership in Liberty Kenya from 57 per cent to 73 per cent by acquiring 49.5 million ordinary shares of the listed insurer from KFAMF Sellers and 34.7 million ordinary shares from Coronation Sellers.