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Mixed output in insurance sector

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The insurance sector saw mixed performance in the year ended December 31 2020, with some firms registering increased premiums written and making profit while others posted losses.

According to published financial statements, Nico Life and General Alliance Insurance were among companies which posted a surge in profit during the year under review.

On the other hand, profit for Nico General subdued while United General Insurance incurred a loss.

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In its audited financial results, Nico Life shows that it posted profit-after-tax of K9.3 billion in the year from K7.2 billion in 2019.

General Alliance, on the other hand, posted a K1.5 billion profit compared to a K859.6 million profit it registered in the preceding year.

Nico General registered a subdued profit of K1.7 billion from K1.8 billion registered in the preceding year while UGI registered a K160.5 million loss compared to a K156.9 million profit posted in 2019.

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Most firms in the industry attribute subdued performance to the Covid pandemic which affected business performance during a greater part of the year under review.

“The changes in behaviour had a marked impact on the country’s economic engine with adverse effects on foreign exchange proceeds, limitations on movement of people and general liquidity challenges for businesses in the country,” reads a report from General Alliance.

Players in the sector are, however, optimistic about a positive outlook, banking hopes on the onset of the Covid vaccine and the decrease in Covid cases locally.

“Directors are optimistic about the prospect of an improved operating environment in 2021 in spite of the uncertainties posed by the Covid pandemic, the vaccination campaign notwithstanding,” a statement from UGI reads.

The Covid pandemic affected the economy and business environment at large due to restrictions and economic uncertainties posed.

The transportation, tourism and hospitality industries are among the hardest hit.

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