KEY FEATURES
The directors hereby present the unaudited consolidated financial results of Botswana Insurance Holdings Limited (BIHL) and its subsidiaries (the group) for the financial year ended 31 December 2023. The full year audited financials have been delayed due to the extensive work required to compile the new IFRS17 reporting standard notes and disclosures. The audited group financial statements are expected to be published on or before 30 April 2024.
These financial results are presented in accordance with IFRS Accounting Standards (previously IFRS "International Financial Reporting Standards" requirements, and the group has adopted IFRS 17, the insurance reporting standard which took effect on
1 January 2023. The comparative numbers have been restated to comply with this new standard.
REVENUE
EARNINGS
Net insurance service result
Operating profit
ASSETS UNDER MANAGEMENT (AUM)
DIVIDENDS
Paid as dividends during the 2023 financial year
Investment service result
Core earnings
SOLVENCY
Business is well capitalised; required capital for the group is covered
Revenue from contracts with customers
Share of profit of associates
Final dividend proposed net of tax
Value of new businessProfit attributable to equity holders
GROUP EQUITY VALUE
Return on group equity value
P754 million
(Dec 2022:
P402 million)
Made up of:
Interim dividend
P218 million
Final dividend
P285 million
Special dividend
P251 million
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2023
Restated1, 2 | Restated1 | ||
31 Dec | 31 Dec | 31 Dec | |
2023 | 2022 | 2021 | |
P'000 | P'000 | P'000 | |
ASSETS | |||
Property and equipment | 170 052 | 173 158 | 183 232 |
Intangible assets | 97 247 | 101 197 | 107 076 |
Right-of-use assets | 11 879 | 14 713 | 8 112 |
Investment property | 26 480 | 12 260 | 10 160 |
Investments in associates and joint ventures | 1 761 651 | 1 910 194 | 1 972 698 |
Long-term reinsurance assets | - | - | 64 840 |
Non-current asset held for sale | - | 99 988 | - |
Financial assets at fair value through profit or loss | 14 935 316 | 15 411 628 | 15 385 244 |
Bonds | 8 543 705 | 8 426 652 | 8 663 449 |
Investment in property funds and companies | 1 277 962 | 1 205 650 | 1 173 325 |
Equity investments | 3 040 954 | 2 589 245 | 2 403 845 |
Money market instruments | 2 072 695 | 3 190 081 | 3 144 625 |
Loans at amortised cost | - | - | 31 957 |
Other receivables | 135 632 | 186 940 | 140 814 |
Cash and cash equivalents | 170 583 | 400 711 | 137 418 |
Total assets | 17 308 840 | 18 310 789 | 18 041 551 |
EQUITY AND LIABILITIES | |||
Equity attributable to equity holders of the parent | |||
Stated capital | 204 936 | 154 936 | 154 936 |
Non-distributable reserves | 115 842 | 354 149 | 395 716 |
Retained earnings | 3 292 911 | 3 267 691 | 3 190 026 |
Total equity attributable to equity holders of the parent | 3 613 689 | 3 776 776 | 3 740 678 |
Non-controlling interests | 23 751 | 22 428 | 18 728 |
Total equity | 3 637 440 | 3 799 204 | 3 759 406 |
Liabilities | |||
Insurance contract liabilities | 7 391 187 | 6 997 685 | 6 764 028 |
Investment contract liabilities | 3 598 953 | 3 298 512 | 3 238 037 |
External investors in consolidated funds | 2 082 020 | 3 619 273 | 3 635 183 |
Long-term reinsurance liability | 36 346 | 45 486 | - |
Derivatives instrument | 25 429 | 37 259 | 42 366 |
Deferred tax liability | 141 908 | 73 545 | 138 974 |
Lease liability | 12 707 | 16 210 | 9 234 |
Other payables | 357 359 | 394 180 | 449 293 |
Tax payable | 18 624 | 26 246 | 3 441 |
Related party balances | 6 867 | 3 189 | 1 589 |
Total equity and liabilities | 17 308 840 | 18 310 789 | 18 041 551 |
1 Restated for correction of error in the prior period, refer to Appendix A.
2
Restated for transition to IFRS 17, refer to Appendix A.
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2023
Restated1, 2 | ||
31 Dec | 31 Dec | |
2023 | 2022 | |
P'000 | P'000 | |
Net result from life insurance contracts | 585 752 | 143 193 |
Result from life insurance contracts | 601 727 | 156 444 |
Net insurance service result | 286 394 | 277 710 |
Insurance revenue | 2 422 501 | 2 392 542 |
Insurance service expenses | (2 120 634) | (2 089 982) |
Income or expense from reinsurance contracts | (15 473) | (24 850) |
Investment service result | 315 333 | (121 266) |
Insurance finance income or expense | (463 795) | (349 018) |
Reinsurance finance income or expense | (26 935) | (19 511) |
Investment income on assets held in respect of insurance contracts | 806 063 | 247 263 |
Other expenses relating to insurance operations | (15 975) | (13 251) |
Result from other operations | 538 652 | 468 745 |
Revenue from contracts with customers | 295 546 | 259 591 |
Other revenue | 156 969 | 89 925 |
Investment income | 284 903 | (23 920) |
Interest income using the effective interest rate (EIR) | 4 395 | 4 127 |
Other interest income from investment contracts | 179 223 | 245 282 |
Fair value (losses)/gains from derivatives instrument | (11 830) | (5 107) |
Change in fair value of investment contract liabilities | (191 331) | 144 129 |
Change in fair value of external investors' liabilities | 86 571 | 36 538 |
Net changes in investment contract benefits | (265 794) | (281 820) |
Other expenses | (256 018) | (268 942) |
Administration expenses | (218 189) | (204 278) |
Sales remuneration | (37 067) | (63 588) |
Finance cost on leases | (762) | (1 076) |
Impairments | (7 188) | (5 231) |
Profit before equity accounted earnings and other income | 861 198 | 337 765 |
Profit on sale of associate | 141 669 | - |
Share of profit of associates and joint ventures | 78 934 | 216 456 |
Profit before tax | 1 081 801 | 554 221 |
Income tax expense | (302 737) | (105 419) |
Profit for the year | 779 064 | 448 802 |
Profit attributable to: | ||
- Equity holders of the parent | 771 494 | 442 578 |
- Non-controlling interests | 7 570 | 6 224 |
Total profit for the year | 779 064 | 448 802 |
Earnings per share (thebe) (attributable to ordinary equity holders of the parent) | ||
- Basic | 273 | 158 |
- Diluted | 273 | 158 |
1 Restated for correction of error in the prior period, refer to Appendix A.
2
Restated for transition to IFRS 17, refer to Appendix A.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2023
31 Dec | 31 Dec | |
2023 | 2022 | |
P'000 | P'000 | |
Profit for the year | 779 064 | 448 803 |
Other comprehensive income | ||
Items that are or may be reclassified subsequently to profit or loss (net of tax): | ||
Exchange differences on translation of foreign operations | (167 479) | (13 951) |
Total comprehensive income for the year | 611 585 | 434 851 |
Total comprehensive income attributable to: | ||
- Equity holders of the parent | 604 015 | 428 627 |
- Non-controlling interests | 7 570 | 6 224 |
611 585 | 434 851 |
1 Restated for correction of error in the prior period, refer to Appendix A.
2
Restated for transition to IFRS 17, refer to Appendix A.
Restated1, 2
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Total | ||||||
equity | ||||||
attributable | ||||||
Non- | to equity | Non- | ||||
Stated | distributable | Retained | holders of | controlling | Total | |
capital | reserves | earnings | the parent | interest | equity | |
P'000 | P'000 | P'000 | P'000 | P'000 | P'000 | |
Balance as at 31 December 2021 | 154 936 | 395 716 | 2 781 611 | 3 332 263 | 18 728 | 3 350 991 |
IFRS 17 transition adjustment | - | - | 408 154 | 408 154 | - | 408 154 |
Balance as at 1 January 2022 | ||||||
restated2 | 154 936 | 395 716 | 3 189 765 | 3 740 417 | 18 728 | 3 759 145 |
Profit for the year1 | - | - | 442 578 | 442 578 | 6 224 | 448 802 |
Foreign currency translation reserve | ||||||
movement | - | (13 951) | - | (13 951) | - | (13 951) |
Share-based payment expense | - | 5 215 | - | 5 215 | - | 5 215 |
Cost of treasury shares (acquired)/ | ||||||
disposed | - | 1 117 | - | 1 117 | - | 1 117 |
Dividend paid | - | - | (402 440) | (402 440) | (2 524) | (404 964) |
Transfers from non-distributable | ||||||
reserves to retained earnings | - | (33 948) | 33 948 | - | - | - |
Other movements in reserves | - | - | 3 840 | 3 840 | - | 3 840 |
Balance as at 31 December 2022 | ||||||
restated1, 2 | 154 936 | 354 149 | 3 267 691 | 3 776 776 | 22 428 | 3 799 204 |
Profit for the year Foreign currency translation reserve movement Share-based payment expense Cost of treasury shares (acquired)/ disposed New shares issued Dividend paid Transfers from non-distributable reserves to retained earnings Other movements in reserves | - - - - - 771 494 771 494 7 570 779 064 (167 479) (47 066) (33 223) - - - (167 479) (47 066) - 9 461 (753 930) (33 223) 50 000 (753 930) - - - - (6 247) (167 479) (47 066) (33 223) 50 000 (760 177) |
50 000 - - - - - - (9 461) 17 117 - 17 117 - - - 17 117 | |
Balance as at 31 December 2023 | 204 936 115 842 3 292 911 3 613 689 23 751 3 637 440 |
1 Restated for correction of error in the prior period, refer to Appendix A.
2
Restated for transition to IFRS 17, refer to Appendix A.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2023
31 Dec | 31 Dec | |
2023 | 2022 | |
P'000 | P'000 | |
Cash generated (utilised in)/generated from operations | (425 600) | 244 493 |
Cash generated from operations1 | 115 692 | 244 688 |
Interest received | 246 218 | 295 056 |
Dividend received from equity investments | 56 851 | 70 791 |
Dividend received from associates and joint ventures | 144 928 | 149 844 |
Interest paid | (762) | (1 076) |
Tax paid | (228 350) | (109 846) |
Dividend paid | (760 177) | (404 964) |
Net cash flow utilised in investing activities1 | 235 145 | 23 464 |
Purchase of property and equipment | (8 953) | (6 652) |
Purchase of computer software | (5 902) | (5 201) |
Receipts from loans receivable at amortised cost | - | 35 317 |
Proceeds from sale of investment in associates | 250 000 | - |
Net cash flows from financing activities | (39 673) | (4 664) |
Payment of principal portion of lease liabilities | (6 450) | (5 781) |
Disposal of treasury shares | (33 223) | 1 117 |
Net (decrease)/increase in cash and cash equivalents | (230 128) | 263 293 |
Cash and cash equivalents at the beginning of the year | 400 711 | 137 418 |
Cash and cash equivalents at the end of the year | 170 583 | 400 711 |
Restated
1 The prior year has been restated due the error classification of cash movements in investments held as part of operating activities, refer to Appendix A.
GROUP EMBEDDED VALUE
For the year ended 31 December 2023
GROUP EQUITY VALUE
The Group equity value is an aggregate of embedded value from the life insurance covered business and the fair value of all other shareholders' net assets. It represents an estimate of the economic value of the group excluding the value attributable to future new business from life insurance and the value attributable to minorities.
The group equity value comprises:
• The value of the shareholders' net assets;
• Fair value adjustments; and
• The value of in-force business including the value of new business written during the year.
DEFINITION OF EMBEDDED VALUE
The embedded value represents an estimate of the economic value of the life insurance covered business excluding the value attributable to future new business. Covered business represents the Group's long-term insurance business for which the value of new and in-force contracts is attributable to shareholders.
The value of in-force business is the present value of future after-tax profits arising from business in force at the valuation date, discounted at the risk discount rate, and adjusted for the cost of capital required to support the business.
The value of new business represents the value of projected after-tax profits at the point of sale arising from new policies sold during the year ended 31 December 2023, accumulated to the end of the year at the risk discount rate. The value is adjusted for the cost of capital required to support the new business.
Year ended | Year ended | |
31 Dec | 31 Dec | |
2023 | 2022 | |
Group equity value results | P'000 | P'000 |
Shareholders' net assets after fair value adjustments | 3 212 601 | 3 464 538 |
Shareholders' net assets, excluding goodwill | 3 638 614 | 3 464 538 |
Fair value adjustments | (426 013) | - |
Value of in-force | 2 166 084 | 2 294 753 |
Value before cost of capital | 1 986 011 | 1 910 101 |
Fair value adjustments | 314 080 | 519 774 |
Cost of capital | (134 007) | (135 122) |
Required capital | 457 412 | 447 951 |
Required capital cover | 7,00 | 7,70 |
Group equity value per share (Pula) | 18,90 | 20,40 |
Group equity value at the beginning of the year | 5 759 291 | 5 292 077 |
IFRS 17 transition adjustment | 75 539 | - |
Asset mismatch reserve | (44 080) | - |
Group equity value at the beginning of the year - restated | 5 790 750 | - |
Group equity value at the end of year | 5 378 685 | 5 759 291 |
Group equity value earnings | 477 022 | 892 629 |
Change in group equity value | (412 066) | 467 214 |
Movement in capital | 135 158 | 22 975 |
Dividends paid | 753 930 | 402 440 |
Return on group equity value | 8,3% | 16,9% |
Year ended | Year ended | |
31 Dec | 31 Dec | |
2023 | 2022 | |
Group equity value results | P'000 | P'000 |
These earnings can be analysed as follows: | ||
Embedded value earnings from covered business | ||
Expected return on life business in force | 203 811 | 209 011 |
Value of new business | 140 347 | 176 199 |
Operating experience variances | 179 931 | 103 876 |
Mortality/morbidity | (10 557) | 100 607 |
Persistency | 12 225 | (10 115) |
Expenses | 20 951 | (7 037) |
Working capital | 126 787 | - |
Other | 30 525 | 20 421 |
Operating assumption changes | (253 274) | (76 972) |
Mortality/morbidity | (64 230) | (41 109) |
Persistency | (166 069) | (6 911) |
Expenses | (78 200) | (10 673) |
Other | 55 225 | (18 279) |
Embedded value earnings from operations | 270 815 | 412 113 |
Investment variances | 143 974 | 82 605 |
Economic assumption changes | 109 209 | (17 524) |
Investment return | (70 720) | 29 313 |
Risk discount rate | 179 929 | (46 837) |
Embedded value earnings from covered business | 523 998 | 477 194 |
Return on shareholders' assets | 158 718 | 263 576 |
Investment returns | 14 760 | 15 198 |
Net profit non-life operations | 143 958 | 248 378 |
Change in shareholders' fund adjustments | (205 693) | 151 860 |
Changes in treasury share adjustments | 2 627 | (640) |
Movement in fair value of incentive scheme shares | (47) | 13 991 |
Movement in present value of holding company expenses | (28 560) | (7 974) |
Movement in other net worth adjustments | (179 713) | 146 483 |
Group equity value earnings | 477 023 | 892 629 |
GROUP EMBEDDED VALUE continued
Year ended | Year ended | |
31 Dec | 31 Dec | |
2023 | 2022 | |
P'000 | P'000 | |
a) Value of new business | ||
Value of new business at point of sale | 140 347 | 160 274 |
Value before cost of capital | 149 715 | 173 338 |
Recurring premium | 79 139 | 83 129 |
Single premium | 70 576 | 90 209 |
Cost of capital | (9 368) | (13 064) |
b) Fair value adjustments | 314 080 | 519 773 |
Staff share scheme | (23 006) | (22 959) |
Non-life operations write-up to fair value (Bifm) | 389 923 | 332 087 |
Non-life operations write-up to fair value - other | 100 295 | 255 261 |
Group holding expenses | (194 927) | (166 367) |
Reversal of cross-holding adjustment | 41 795 | 39 168 |
Consisting of: | ||
Net asset value adjustments | ||
Value of in-force adjustments | 314 080 | 519 773 |
c) Assumptions | ||
The main assumptions used are as follows: | ||
Economic assumptions | % p.a. | % p.a. |
Risk discount rate | 10,15 | 11,65 |
Overall investment return (before taxation) | 6,65 | 8,15 |
Expense inflation rate | 4,10 | 5,15 |
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Botswana Insurance Holding Limited published this content on 27 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 March 2024 07:04:06 UTC.