Britam Group is set to send 100 employees home in what it terms as a cost-cutting measure.
“The early retirement is part of our business realignment process that focuses on building and growing market leadership through greater efficiency driven by innovation and technological advancement,” said Britam Group managing director Benson Wairegi in a statement.
Early this year Britam issued a profit warning for the year ended December 2017, becoming the ninth publicly traded firm to anticipate an earnings decline of at least 25 per cent. The move on Britam salaries is being seen as an effort at trimming declining profitability.
The firm said at the time that its net profit for the period would drop from the Sh2.4 billion it reported in the previous year, which benefited from the adoption of a new valuation system that depressed its liabilities.
“The board of directors… wishes to inform shareholders of the company… the earnings are expected to decrease by at least 25 per cent compared to the same period in 2016,” the insurer said in a statement on January 5. The expected decline in earnings is mainly due to a change, in 2016, of the valuation method of the long term liabilities to the gross premium valuation (GPV) methodology from the previously applied net premium valuation (NPV),” it said.
It is not clear though how the spared Britam salaries will affect its profitability. It is assumed that Britam salaries are some of the leading in the local insurance sector.
