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.
Cell City rewards customers
Cell City gave away two Toyota Hilux pick up cars worth about P300 000 and three Hisense televion sets worth P15 000 each to their customers through their annual competition.
In partnership with Hisense and Orange Botswana, Cell City conducts annual competitions to reward their customers and contribute to citizen empowerment. Handing over the cars on Friday, Cell City Chief Executive Officer, Brian White said through the competition they want to satisfy their customers and give back to the community. “Cell City and Orange clients were given a chance to win either a Toyota Hilux pickup or a Hisense television set.
All they had to do was purchase any Hisense mobile phone from a Cell City or Orange retail outlet and fill in the competition form in the store,” said White.Thato Ntshabele, who won one of the cars told the Business Trends that she bought a Hisense cell phone worth P900. 00.
“I never expected that I can win a car. I was just filling the forms and dropped into the entry box and I forgot about it. I am so happy to receive this prize and I thank Cell City for this opportunity,” said Ntshabele. Another winner, Dimakatso Mmusi expressed his excitement saying he had always wanted a van and he is grateful to Cell City.
“I just bought a cell phone worth P899.00 at Cell City Railpark mall, I never expected anything, and I was just submitting the form as I was requested by the shop assistants. This car is very useful to me,” said Dimakatso.
Smecha chillie hits the shelves
For the love of food and the passion to apply modern technology processes in food manufacturing locally, Kgalaletso Mothoagae established her own brand, Smecha specializing in relishes.
She processes and packages chillie in 325 gramms and 1 litre bottles selling at P50 and P150. She told the Business Trends that she decided to process chillies as it is one of the products that are rarely processed in the food industry.
She started cooking it for home consumption and later started selling to friends and currently the product has gone beyond borders at South African Spar shops and Restaurants. “I couldn’t look for any other vegetable as most of them have already been processed in the market. It is my first product of research in the food industry so I found out that I can do good business with this product. This chillie is free from preservatives but still has extended shelf life of 6 months,” said Mothoagae
The Kanye born young lady studied food technology and has the passion to explore the food processing market in Botswana and contribute to reduce the high food import bill. “I wanted to explore more about food and use my skills to contribute to the development of the local food processing and manufacturing industry. I also wanted to supplement my income at the same time,” said Mothoagae.
She has a degree in Food Technology. She says there is a lot of potential for business growth as there is a demand for the product locally and in South Africa. “My main customers are individuals in homes, they have embraced the product, and they love the taste. There is also a market that has been secured in SA; it is available in several shops like spars and some restaurants”. In future, Mothoagae said she would increase the product range to 10 using various vegetables and flavours.
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