Botswana Insurance Holdings Limited (BIHL) group announced its plans to expand its operating division, Legal Guard outside Botswana.
Presenting the group’s half year ended 30 June 2015 results on Wednesday, BIHL group chief executive, Gaffer Hassam said in the next six months they are looking for market opportunities outside Botswana. “Legal Guard has three percent market share in the insurance industry in Botswana, so it has a lot of opportunities. But in the next six months we will be exploring the market opportunities outside Botswana,” said Hassam. Speaking to BG Business he said they have not yet identified the countries but are looking at Southern Africa. He said 2015 will be dedicated to a continued focus on the recovery phase of the business strategy as well as commencement of activities to exploit a dominant market position and related competitive advantages. “The second half of 2015 will also witness the introduction of new products into the market,” said Hassam.
Following the sale of its general insurance business (BIHL Sure!), which comprised short term insurance and legal aid cover, Legal Guard in 2014, BIHL refocused on Legal Guard business. Hassam explained that Legal Guard is the second major contributor to BIHL group revenue after Botswana Life. He said in this year they introduced a new three-year strategy as a roadmap for guiding Legal Guard business through recovery and consolidation to sustainable profitability. “As part of the recovery phase of the strategy, the first half of the year has seen Legal Guard continuing its efforts to reinvigorate the business by increasing sales, improving the customer service experience and enhancing operational efficiencies,” said Hassam. He said the new strategy has resulted in a marked improvement in financial performance as illustrated by 22 percent increase in revenue compared to the first half of 2014. The new strategy is about growing the market and educating the public about legal insurance.
“We have seen a meaningful growth in profits this year so we want to maintain this growth standard,” he said. “Legal Guard was struggling in profitability but the rebranding has resulted in the positive profit. Its brand identity has also been refreshed to symbolise the rejuvenation of the business,” he said. Since its establishment in 2012, BIHL Sure! was continually recording losses as it registered an operating loss of P27 million in 2014. In the six months ended 30 June 2015 the group has recorded the net insurance premium increase of 32 percent to P1.3 billion and the value of new business increased by nine percent to P78.9 million.
In the first half of 2015, the group rolled out the new five-year strategy for the life insurance, which is focused on steering the company towards sustained growth. Hassam said with the implementation of the new strategy now underway, management firmly believes that the company will continue delivering real sustainable growth on all its key performance indicators despite growing competition and muted economic growth. BIHL group operations include Life Insurance, (Botswana Life), asset management (Botswana Insurance Fund Management) and Legal Guard. It also has associate holdings of 23 percent in Letshego Holdings and 33 percent in Funeral Services Group (FSG).