The only listed life insurer at the Nairobi bourse posted a massive rise in pre-tax profits from a loss of Ksh16 mn (US$0.2 mn) to Ksh174 mn (US$2.3 mn) for the year ended 31st December 2009. Pan African Insurance Holdings' top-line growth continued to be strong with gross premium rising 20.5% from Ksh2.5 bn (US$32.6 mn) to Ksh3.0 bn (US$39.3 mn); however, underwriting capacity was also reduced with the retention ratio dropping marginally from 7.6% to 6.7%. The management stated that the operating surplus for 2009 remained low due to lower than expected new business volumes as well as the persisteny in the individual life business and premium collection challenges. The value of new business went up by 22% to Ksh111 mn while the number of lives covered by Pan Africa Assurance Limited is now over 587,000. Pan Africa Life embedded Value (EV) decreased by 13% to Ksh1.45 bn while Group EV increased by 26% to Ksh3.8 bn.

A huge contributor to overall income that rose 32% to Ksh3.4 bn (US$44.1 mn) was the return from investment income that realized a 123% gain during the period from Ksh206 mn (US$2.7 mn) to Ksh460 mn (US$6.0 mn). The improvement in the company's investment portfolio in 2009 came at a time when a number of the company's equity holdings were disposed and there was a shift into risk-free treasuries. The management had the following to say about the political-economic environment "...financial market conditions remained extremely difficult for much longer than initially envisaged despite wide-ranging policy measures to stimulate a turnaround especially in the developed world. Economic prospects therefore remained low in 2009 with equity markets making little or no gains...".

The change in overall income more than offset the 47% increase in policyholder benefits that rose from Ksh1.5 bn (US$19.8 mn) to Ksh2.3 bn (US$29.2 mn); However, the overall combined ratio rose by 11% from 103.8% to 114.8% underscoring the importance of investment income and associate profits to the company's bottom-line. The company's share of associate profits added further gains to the bottom-line rising from a loss of Ksh134 mn (US$1.7 mn) to Ksh66 mn (US$0.9 mn). The company's holds a minority interest in APA Insurance (a general insurer) with the remaining interest owned by Apollo Insurance (another Kenyan life insurer).


The company's EPS rose 245% from a loss of Ksh2.00 to a profit of Ksh2.90 and the company announced a first and final dividend of Kshs1.70 (payout ratio of 58.6%) for the period. The dividend will be paid to shareholders on or about 28th June 2010 and will be paid to shareholders on the register at the close of business on 26th May 2010. As at the 12th March, 2010, the company had a market value of Ksh2.4 bn (US$31.8 mn), a trailing PE ratio of 17.6x, trailing PEG ratio of 0.1x and a trailing PBV of 1.8x.