Listed non-bank financial services company Sanlam Kenya PLC has posted a Sh291.8 million loss, up from a Sh99.1 million loss posted during the same period last year.

Sanlam has attributed the loss to one-off forex losses and a more prudent company stance towards provisioning as the business manages its future financial outcomes in a recovery period from the Covid-19 pandemic in 2020.

But its insurance revenues improved over the half-year period under review, as it announced it had restructured its foreign currency-denominated loan into a local currency facility.

The disclosure was made as the company released its half-year trading results in a bold move geared at preserving shareholder value.

Sanlam confirmed it restructured US$27 million loans into a Sh3 billion facility with a local bank to mitigate against future forex losses due to the weakening of the Kenya Shilling against USD.

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Its gross insurance revenues improved significantly for both Life and General business under the dark cloud of the Covid-19 pandemic.

Sanlam’s half-year consolidated gross written premiums at Sh5.9 billion improved by 38 per cent compared to the previous year's Sh4.3 billion, with Sanlam General posting a 32 per cent growth, while Sanlam Life posted a 44 per cent growth in insurance revenues.

Investment income at Sh1.5 billion was 23 per cent higher than the previous year's Sh1.2 billion, with net benefits and claims growing in line with the growth in insurance revenues.

Sanlam Group CEO Dr Patrick Tumbo said the business continues to take a long-term view in executing its strategy and will build on current successes in its insurance business to grow profitably into the future.

In its 2020 annual report, Sanlam had disclosed the significant currency exposure on the borrowings, which stood at Sh2.976 billion at the end of the last financial year.

The disclosure confirmed that the loan proceeds were in US$ and the loan interest payments were also in US$.

"The debt restructuring which commenced in 2020 is now complete, and it will provide much-needed relief as the forex loss risk is now mitigated going forward," Dr Tumbo said.

He added, "At Sanlam Kenya Plc, we have also been affected by covid-19, which has accelerated life and general insurance policy claims, but we expect swift recovery as the pandemic containment measures including mass vaccinations begin to bear fruit."

As part of its strategic business plan, Dr Tumbo said the firm is executing a sustainable plan considering impacts of the pandemic on the economy and insurance industry as a whole.

He said the plan focuses on enhancing value drawn from the firm's business digitization initiatives, including adopting e-commerce insurance products distribution and sales.

Dr Tumbo added that the utilization of digital solutions would positively reduce the company’s operating cost base while improving customer experience.

He said Sanlam Kenya has also structured several strategic partnerships, which are expected to bear benefits from the second half of the year going forward.