Higher expenses ‘eat up’ profit at African Life

African Life Assurance - Tanzania net profit has slowed almost 17 per cent, a trend attributed to expenses that mainly constituted policy benefits, which ended up eating away income generated last year.

African Life, one of the biggest life insurance firms in the country, posted a 8.55bn/- net profit in 2014, down from 10.3bn/- made in 2013 amid rising total expenses.

The firm financial statement issued recently shows that the profit was eaten up by expenses that went up by almost 13 per cent to 37.9bn/- last year driven mainly by policy benefits.

The policy benefit increased to 12.57bn/- last year versus 8.86bn/- in 2013, while management expenses and commission rose slightly to 6.24bn/- and 9.93bn/- respectively.

Apart from expenses, which drove down the profit, the firm also paid more taxes in 2014 compared to 2013, despite posting a relative low profit in the former year. African Life paid 583.77m/- in 2014 as taxes against 211.08m/- in 2013.

However, despite the profit hiccups, the firm - first specialist life insurance to enter the country market, generated hefty net premium that increased by some 13 per cent to 28.87bn/-.

The insurer’s assets also grew to 37.18bn/- in 2014 compared to 32.77bn/- in 2013. The statistics from Traffic Division of Police show that the rate of death as a result of road accidents decreased in 2014 to 3,760 compared to 4,002 in 2013, but still the amount was almost similar to 3,969 deaths recorded in 2012.

The police data further show that the number of road accidents reported in 2014 were reasonably lower at 14,360 versus 23,842 in 2013. Despite the low number of accidents in 2014, the death toll was somewhat high.

African Life controls almost half of the country life assurance business, while corporate clients contribute about 85 per cent of their business. The country’s population is estimated at 45 million.
Source: Daily News, reported from Dar es Salaam, Tanzania
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