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BIHL’s short term insurance continues to suffer

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The first half of 2017 has seen a continuation of challenging market conditions for the short-term insurance at Botswana Insurance Holdings Limited (BIHL) group as it continues to experience a significant decline in new business. The Group led by Cathrine Letebele-Letegele, indicates in its recently released half year results, that in addition to the decline in new business, there has also been a rise in policy cancellations.

Many of the cancellations emanate from clients experiencing financial constraints, which have made it difficult for them to continue with their Legal Guard policies, according to the group executives. “This has impacted revenue negatively with premium income being 1.4 percent lower than for the same period last year,” reads the results statement. During the first half of the year, Legal Guard together with its sister company, Botswana Life Insurance Limited (BLIL), embarked on and concluded a restructuring exercise.

At the time, management indicated that it had become imperative to align the business’ cost base to levels more appropriate to a business of the size and nature of Legal Guard and thereby improve the company’s ability to achieve sustainable profitability. Legal Guard achieved an operating loss of P0.9 million for the first six months of 2017.

The main cause of this outturn was a once off P2.1 million cost incurred as part of the restructuring exercise completed on June 2017. Despite these negatives, the first half of 2017 saw a significant achievement for the business with the go-live of its new core operating system in April 2017. The system is expected to improve revenue stability going forward as well as provide an enhanced platform for claims administration.

The system will also facilitate internal process efficiency improvements and the division’s quality of decision making information which will, in turn, reduce the business’ cost ratios, whilst also, releasing resources to focus on customer experience improvements. During the 2015/16 financial year, group reported on its 2016 year end results that the business effected a change in accounting for claims, resulting in an increase in outstanding claims reserves of P2.7 million.

This change, which was made to bring the business in line with recommended best practice by the insurance industry regulator, significantly impacted the profit for the year. However, at the time, General Manager Mike Dube indicated that, the business considered this as a prudent move and its benefits will be felt going forward. Meanwhile, in trying to turnaround the short term insurance business, the management has embarked on an exercise focused on improving the productivity of the distribution force and this is expected to impact new business going forward. According to management, however, for 2017 uncertainty in both the local and global markets is expected to continue to affect the results.

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Matambo calls on financial sector to pick GDP

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Finance Minister, kenneth Matambo

Finance Minister Kenneth Matambo has announced that government is committed to support financial service sector to prop up the country’s Gross Domestic Product (GDP).

Currently contributing over 13 percent to GDP, Matambo said the sector has potential to increase its share. “Hence government’s interest in the sector,” said Matambo addressing delegates at the inaugural Botswana Insurance Holdings Limited (BIHL), Global Financial Summit.

The country has built a strong, resilient and fast growing financial sector underpinned by a robust regulatory framework. The finance minister who is expected to step down next year, noted that government’s commitment to the financial service sector has this year been buttressed by a number of laws passed in July relating to money laundering activities.

In addition, Matambo said the continued investment in the development of information, communication and technologies (ICTs) backbone infrastructure is also to support local banks’ rising appetite for online services.

The Minister said the country remains committed to maintaining micro-economic stability to spur private sector participation in the economy. “Our vision is to become a high income country by 2036,” said Matambo, challenging the private sector to step forward and help government to develop the country, bemoaning the low levels of financial inclusion and shallow domestic capital markets.

He said the private sector should come up with more initiatives to develop further the local capital markets. The Minister’s sentiments were also shared by Martin Davies, Managing Director for Emerging Markets and Africa at Deloitte who has challenged the country to start dealing with its low manufacturing value add.

“How do we start to diversify beyond the single commodity economy,” quizzed Davies, adding that manufacturing increase is vital for low inequality across the country.

“Inequality results in bad public policy, as the state starts to believe and think they have to intervene more,” said Davies, highlighting that the country needs to move away from the absolute concept of state drive growth. Meanwhile, minister Matambo has applauded the private sector for leading economic dialogue in the country through events such as the BIHL Global Finance Summit.

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First Lady advises women entrepreneurs

Keikantse Lesemela

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First lady, Neo Masisi

First Lady, Neo Masisi has urged women entrepreneurs to bring change in the economic development of the country and the rest of Africa.

Speaking during the Lioness Lean in Africa breakfast on Friday, Masisi said women entrepreneurs are remarkable engines of economic growth and job creation. “I believe women entrepreneurs hold incredible potential and credentials on the continent because Africa has the highest percentage of women entrepreneurs in the world.

It is projected that millions of much needed jobs will be created over the next decade and these will be created predominantly through small businesses which are mostly run by women,” said Masisi.She highlighted that women entrepreneurs are also the most powerful engine for equitably distributing growth and they are also solutions for addressing inequality on the continent.

“It is a proven fact that for many generations, women understand the simple concept of barter and commerce. These are the role models of our past and our present and they will continue to inspire new generations to do more for business to grow,” she said.

The Lioness Lean In Breakfast Series brings together inspirational and successful women entrepreneurs to share, inspire and connect with the next generation of great women-led start-ups.

The platform is based on a breakfast networking and speaker presentation format, which has been organized in locations across the African continent for the past year by Lionesses of Africa, empowering over one million women entrepreneurs across the continent.

Stanbic Bank Botswana Head of Personal Markets, Omphemetse Dube said they are pleased to bring the Lionesses of Africa Lean In platform to Botswana once again to bring together women entrepreneurs in the country and help to nurture their growth further.

“Botswana is blessed with a number of thriving female entrepreneurs, and the potential for the next generation of talent is strong. Platforms such as this are therefore paramount in growing the cause and we as a bank are proud to help champion that movement further,” said Dube.

Founder and CEO of Lionesses of Africa,Melanie Hawken noted that Gaborone is a growing and exciting centre for women’s entrepreneurship in Africa. “This is a must-attend event for women entrepreneurs in the country as it gives them the opportunity to hear the inspiring entrepreneurial stories of women who are building great businesses here,” she said.

The annual Lionesses of Africa event allows entrepreneurs to benefit from the insights and advice of women entrepreneurs who have seen and experienced it all and to also provide an excellent opportunity for networking.

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