By JAMES ANYANZWA

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Nizar Juma, the Jubilee Holdings Ltd chairman, spoke with James Anyanzwa about the insurer’s regional plans and preparedness for the IFRS 17

What did you do to survive the economic challenges triggered by the Covid-19 pandemic and ensure a good return for shareholders?

We didn’t cut our employees’ salaries, we did not declare any redundancies and we did not increase the cost of our products. We also helped our customers by giving them more time if they couldn’t pay or keep their policies up.

However, we were tight on our expenses. Our expenses were the lowest in the industry. This helped us to maintain our top line. We took a hit on our bottom-line. We lost about Ksh500 million ($4.3 million) in medical claims. So our insurance result was less exciting than in 2020. But on the whole we made up for it because we did well in other investments.

People ask why we increased our investments in Bujagali, Seacom and Farmer’s Choice. These give us protection when times are not good. Look at what is happening on the Nairobi Securities Exchange. It is going down and you can’t protect yourself against that.

Seven years ago, we took a decision to reduce our investments in the NSE and increase them in non-quoted securities and in government securities. That has paid off, and now we are solid.

If you look at our record for the past 15 years, you will find that we are growing steadily. We are keeping our expenses low.

You have been reducing your investments in general insurance in the region. What informed this decision?

General insurance is becoming a commodity. Everybody with a briefcase is selling general insurance. It is competitive and unprofitable. Underwriters are making losses in motor insurance because there is so much fraud.

The way for us to maintain our superiority was to get a strategic partner. We settled on Allianz, but it took four years to conclude the deal.

With Allianz we would bring in state-of-the-art methodology in the insurance business, like digitalisation and new products.

When will the share sale between Jubilee Holdings and Allianz in Mauritius and Tanzania be concluded?

Tanzania is concluded and signed. We are just waiting for some approvals from the regulator, which should come this month.

Mauritius may take another month after that. By the end of May everything should be signed and concluded.

In Tanzania we sold 51 percent of the general insurance business to Allianz because we wanted to have at least one third owned by locals. Jubilee remains with about 20 percent.

In Mauritius we sold 66 percent of our general insurance business to Allianz and remained with 34 percent.

Does Jubilee’s transaction with Allianz impact your regional expansion plan?

It helps us. For example, we are going to go to Ethiopia as soon as they open up. Currently, the Ethiopian government does not allow foreign insurance companies, but we are hopeful that they will this year. If we go to Ethiopia with our medical and life business, we will ask Allianz if they want to come along with their general insurance business.

We have commitments in Kenya, Uganda, Tanzania, Mauritius and Burundi, where we operate. Outside these five countries, we are free to go where we want.

We are also considering the Democratic Republic of Congo, and we want to increase our market share in Kenya, Uganda and Tanzania.

The IFRS 17 is coming into effect from January 1, 2023. How is Jubilee Holdings prepared in terms of compliance?

We are all going to go through a nightmare. For instance, for some of our non-quoted investments like Farmer’s Choice and Bujagali, which are in our life, medical or general company, we have to shift them all into Jubilee Holdings, otherwise we pay a 40 percent capital charge on our investment in those companies.

We also need money because we are moving from a 100 percent capital adequacy ratio requirement to 200 percent.

The second thing is that our shares in our non-quoted investments are now going to be bought by Jubilee Holdings.

What are your spending plans for this year?

We have increased our dividend so that takes about Ksh1 billion ($8.69 million) this year.

We are also looking to increase our presence in our existing markets and buy companies in life or health.