[Kenya] Kenindia raises interest on retirement funds as investment income rise
Kenindia Assurance has increased interest payable on retirement funds under its management to 11.5% for the year December 2018. This is a rise from the 11.25% it posted in 2017.
The rise was on the back of remarkable growth in net investment income and profitability, in a year marked by a sharp decline in the earnings of most insurance companies, with major players issuing a profit warning.
In the year ended 31 December 2018, the company recorded gross premium income (including pension fund deposits and annuities) of KShs 8.401 billion compared to KShs 7.656 billion, an increase of 9.73%.
The net investment income of the Company has increased by 8.56% from KShs 3.924 billion to KShs 4.260 billion. The net investment income of Life Business was KShs 3.781 billion compared to KShs 3.419 billion in 2017, an increase of 10.59%.
In the same period, net profit rose to KShs 329 million up from KShs 245 million reported in 2017, representing increase of 34.21%.
“Our 2018 results are a significant improvement over 2017 on all key measures, with excellent growth in profitability, driven by strong growth in written premium, investment income, and a material uplift in new business growth. This has enabled us to pass on the benefits to our customers by reviewing upward the interest we pay on the funds they invest with us,” said Kenindia Assurance Managing Director Mr. Inderjeet Singh.
“Premiums have continued to grow due to new business underwritten, introduction of new products and enhanced business relationships with brokers and agents. Coupled with a good track record of claim settlement, policyholders have continued to give us more business,” he added.
The long-term business, including pension fund deposits and annuities recorded gross premium income growth of KShs 5.547 billion up from KShs 4.641 billion earned in 2017, a 19.52% growth. Premium income for Ordinary Life was KShs 1.448 billion compared to KShs 1.235 billion for the year 2017, a 17.25% growth.
Annuities business increased from KShs 377.252 million to KShs 472.061 million, an increase of 25.13% over the previous year.
Contributions under Deposit Administration and Retirement Fund increased from KShs 2.955 billion to KShs 3.579 billion, registering a growth of 21.12%.
The funds in the long term business (Life Fund), Annuities and Deposit Administration stood at KShs 32.824 billion as at 31st December 2018 compared to KShs 29.399 billion in the previous year representing a growth of 11.65%.
“Investment income held steady during the year, despite the poor performance of the stock market. This positive investment performance was driven by a well thought out strategy on diversification of the investment portfolio across key stable asset classes including properties and fixed income investments,” Mr. Singh said.