Pan Africa Okays Sh57m Dividend

By Eddyson Lugangwa Posted 15 May 2006 @ 12:43 am EET     Print     Reprint     E-Mail     Comments

Nairobi (AP) - Pan Africa Insurance Group yesterday approved a dividend of Sh57.6 million to shareholders for the financial year ended December 31, 2005.

The group also announced revision to its dividend policy to ensure that payouts are made from realised gains/profits.

"The group's philosophy will be to maintain a smooth dividend growth pattern that will not necessarily reflect the Group's earnings and to pay dividends from profits," chairman John Simba said.

He said the board had also decided the dividend policy should be reviewed annually not only to ensure shareholder's expectations are met but also to retain a strong capital position.

Simba was speaking during the group's 61st Annual General Meeting in Nairobi. The meeting approved the company's decision to pay a dividend of Sh1.20 per share to shareholders appearing in the register by May 12, 2006.

The dividend represents an increase of 20 per cent per share over the payout made in 2004. Basic earnings per share have improved to Sh3.68 from Sh1.95 in 2004.

Simba observed that the strong foundation laid following restructuring of the group's operations had resulted in marked improvement of its financial performance.

He said the group's total embedded value (value of assets) improved by 17.1 per cent to Sh1.507 billion. The chief Executive, Andrew Greenwood, said Pan Africa Life, a subsidiary of the group, would diversify into non-traditional markets to reduce risk of exposure to one line of business while at the same time marketing its products to a broader customer base.

He said the company was already partnering with financial institutions in the country to launch new life insurance products while awaiting amendments to the current Insurance and Banking Acts to allow banks to sell insurance products.

Greenwood decried heavy premium undercutting in corporate business, in particular Group Life Assurance schemes, which have had some negative impact on its premium income.

He, however, said despite the stiff competition, the company acquired 19 new schemes, which contributed 30 per cent of its premium income for the year under review.