NAIROBI, Kenya August 30 – Old Mutual Holdings PLC recorded a pre-tax loss of Sh375 million in the first six months of 2022, compared to a pre-tax profit of Sh552 million recorded in a similar period in 2021 .
The performance was achieved against a backdrop of deteriorating global economic environment, mainly due to the Russian-Ukrainian conflict
Gross written premiums increased by 29%, driven by both short-term and long-term insurance activities.
The Group’s long-term and short-term insurance activities supported the growth recorded over the same period in 2021 thanks to our Customer Centricity strategy.
“Highlights of our business during this period compared to the same period in 2021 include strong revenue growth, reduced investment income due to deteriorating NSE performance and higher interest rates,” said Arthur Oginga, chief executive of Old Mutual Group.
Oginga added that increases in the company’s cost base driven by investments and the weakening of the currency, and higher financial costs due to the weakening of the Kenyan shilling against the US dollar have resulted in a net loss reported.
In addition, net investment income declined by 34% due to falling equity markets and rising interest rates in the Kenyan market, which impacted equity and bond valuations within of our business.
Operating expenses increased by 30% compared to the same period of 2021. This was largely due to marketing expenses following the group’s renaming to Old Mutual in Kenya and Rwanda, additional software and premium taxes related to business volume growth.
The expenses were also attributed to growth in USD denominated costs due to currency devaluation and recruitment of key positions that were vacant in the prior year and general inflationary growth.
Finance charges on borrowings increased by 54% compared to a similar period in 2021, due to foreign exchange losses on part of the Group’s debt denominated in US dollars, as the Kenyan shilling depreciated by 9.25 % during the first half of the year.