2017 HALF YEAR RESULTS REVIEW-

ANALYSTS ROUNDTABLE BREAKFAST – 7th September 2017 – Venue: Sarova Panafric

1 Contents

1. Overview of Business, Economy & Industry

2. Strategy Update

3. 2017 Half Year Financial Performance

2 1. Who we are • Our Business • Economic & Industry Highlights

3 About Britam Holdings Plc

Britam is a leading diversified group listed on the Securities Exchange. The group has presence in seven countries in Africa namely; , , , , , and .

The group offers a wide range of financial solutions in Life Assurance, General , Health Insurance, Retirement Planning, Asset Management and Property. These solutions enable our customers to protect and grow their wealth and achieve their financial goals every step of the way.

4 Group Structure

Britam Holdings Plc

Insurance Britam Asset Britam Properties Portfolio Business Managers – 100.0% Investments

Britam Asset Britam Asset Equity Bank Managers Kenya Managers Uganda HF Group - 48.8% Group – 8.1% – 100.0% – 100.0%

Britam Britam Britam General Britam Britam Britam Britam Britam Insurance Life Insurance Insurance Insurance Insurance Insurance Insurance Malawi – Tanzania Kenya – Kenya – Uganda – S. Sudan Rwanda Mozambique 100.0% 100.0% 100.0% – 55.0% 100.0% – 100.0% - 100% – 98.0%

5 Vision, Mission and Values

“Providing you with financial security EVERY MISSION STEP OF THE WAY”

“To be the LEADING diversified financial services VISION company in our chosen markets across Africa”

BRAND “With you every step of the way” POSITION

Respect Innovation VALUES Integrity Customer Focus

6 1.1. Macroeconomic & Sector Highlights • Macro-economic update • Industry highlights

7 Macro-Economic Review

GDP Rates

Mozambique 4.2%

Malawi 4.5%

Rwanda 6.1%

Tanzania 7.1%

Uganda 3.9%

Kenya 4.8%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 2017 2016

Growth forecasted for most economies we operate in.

8 Industry Highlights

In Kenya; Q1 2017, insurance premiums grew by 14.4% Insurance compared to 9.6% in Q1 2016. Life insurance premiums at Shs 21.56 billion up 9.6%. General insurance premiums at Shs 41.6 billion up 24.8%.

Industry Assets Under Management (AUM) grew to Asset Management Shs 1 trillion in 2016 from Shs 800 billion in 2015. Introduction Exchange Traded Funds (ETFs) .

Regulatory In Kenya, we saw the introduction of Risk Based Capital (RBC). Introduction of Cash & Carry policy in Rwanda.

Competition Entry of new players in the Kenyan market e.g. Allianz and Prudential.

9 Q1 2017 Market Share Analysis - Kenya

Life Insurance General Insurance Asset Management

CIC Britam 21.4% Jubilee 11.0% 24.2%

Britam 18.7% ICEA Lion 18.7% UAP/Old Mutual 8.0%

Old Mutual 14.5% Jubilee 11.7% Britam 7.5%

ICEA 9.6% CIC Life 7.7% APA 6.8% Stanlib Investments 5.9% Sanlam 7.0% CIC 6.7% Sanlam 5.7% Liberty Life 5.3%

AAR 6.0% CBA Unit Trust Scheme 5.5% Old Mutual/UAP 5.1%

ICEA Lion 5.4% Equity Investment Bank 4.3% Pioneer 4.6%

Britam Life maintained Britam General grew Britam Asset Managers leadership position. market share to 7.47% and maintained the 2nd position attained 3rd in position. in the market.

10 Regional General Insurance Market Share- Q1 2017

Uganda Malawi Rwanda

Britam Rwanda maintained a Britam Uganda increased Britam Malawi maintained a market share of 6%. Note: market share to 3rd Position. market Share at 13%. Market Share data as at 2016.

11 2. Strategy Update

12 2016 – 2020 Strategy Update

Objectives Performance

1. Make all businesses profitable • Most businesses profitable position in H1 2017. PROFITABLE 2. Be the market leader in all our chosen GROWTH markets • Increased revenue contribution from regional 3. Be a truly diversified financial services entities. group 1. Ensure a “one stop shop” and a seamless • 24-hour Contact Centre. CUSTOMER experience for clients SERVICE 2. Engage in continuous brand building to • Customer Relationship Management (CRM) become the trusted partners to our clients system. 1. Increase our share of wallet by designing • Launched mobile distribution channels e.g. our products with customers in mind and new USSD portal (*778#) deliver them in a timely manner INNOVATION 2. Develop innovative partnerships and • Launched various digital portals to better serve distribution channels to increase our our customers and partners e.g. FA, Customer market penetration and Marine Portals etc. 1. Improve operational efficiency and • Embarked on initiatives to bring down our cost- to-income and loss ratios. OPERATIONAL cost-to-income ratio to 20% by 2020 EXCELLENCE 2. Ensure optimum underwriting quality and reduce loss ratios to below 50% • These include; Express motor assessment centre and triaging approach to claims processing etc. 1. Create a high performance, proactive • Rolled out ERP system completed across all ENABLING culture and motivated team. regional entities. TRANSFORMATION 2. Develop an IT ecosystem that support digital enterprise (Project Jawabu) • INSIS medical and motor system.

13 2017 Strategic Focus

Single Customer Operational Project Distribution Service Excellence Jawabu • New branch • 24/7 Contact • Establishment of • ERP structure. Center. an Express Motor enhancements. Assessment • Realignment of • Customer center. • INSIS medical incentives and Relationship and motor compensation Management • Triaging approach insurance structures. (CRM) system. for claims systems. processing. • Implementation • Customer Charter • Digital channels of automated signed off. • Process Review platform Business and Work Motion enhancement. Intelligence (BI) • Development of Studies. reports to data governance enhance branch policy and management. centralized data management team.

14 3. 2017 Half Year Financial Performance

15 Summary Group Consolidated Financial Results

Shs Millions June 2017 June 2016

Gross earned premiums 11,236 10,520

Fund management fees 451 490

Investment income 2,772 2,726 0.6 Net insurance claims,Kenya 2.6% increase in policy holder's benefits and loss adjustment expenses 7,183 4,248 1.0% & Interest1.0% payments/ increase in unit value Operating expenses & finance costs 4,488 4,043

Profit beforeTanzania tax 1.0% 1,282 2,873

Total comprehensive income 1,906 1,875

16 Statement of comprehensive income: Total Income up 16%

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS Group 6 Months to 6 Months to Shs’000 30-06-2017 30-06-2016 Gross earned premium and fund management fees 11,688,195 11,010,588 Less: reinsurance premium ceded (1,491,205) (1,639,368) Net earned revenue 10,196,990 9,371,220 Investment income 2,772,369 2,726,124 Gains/ (losses) on financial assets at fair value through profit or loss 1,090,362 (318,895) Commissions earned 514,775 416,941 Other income 118,495 491,893 Total income 14,692,991 12,687,283 Expenses Net insurance claims, increase0.6 in policyholder's benefits and loss 6,669,113 3,608,468 adjustment expenses Kenya 2.6% Interest payments/ increase in unit value 513,893 639,912 Operating and other expenses 3,898,804 3,529,665 Finance costs 1.0% 589,772 514,036 Commissions 1.0%expense 1,816,824 1,825,156 Total expenses 13,488,406 10,117,237 Profit before share of the profit of associate 1,204,585 2,570,046 share of profit of associate 77,629 303,252 Profit before tax 1,282,215 2,873,298 Income tax (expense)/Tanzania credit 1.0% (287,125) (1,094,403) Profit for the year 995,089 1,778,895 Gains/ (losses) on revaluation of financial assets at fair value through 963,393 (9,587) other comprehensive income Others (52,385) 105,885 Total other comprehensive income 911,008 96,298 Comprehensive income for the year 1,906,097 1,875,193

17 Gross Earned Premiums & Fund Management Fees

0.6

Kenya 2.6% 21,221 20,324 1.0% 1.0%

14,472 Figues in Shs' Millions Shs' in Figues 9,461 Tanzania 1.0% 10,637 11,011 11,688 6,025 4,669

2013 2014 2015 2016 2017

Half year Full year

18 Total Assets at Shs 90.6bn

90,623 83,643 77,632 72,450

46,903 Figures in Shs' Millions Shs' in Figures

2013 2014 2015 2016 Jun-17

19 Consolidated Statement of Financial Position

Shs '000 June-17 Dec-16

Capital Employed Share capital 193,841 193,841 Share premium 4,263,412 4,263,412 Other reserves 13,360,699 11,874,244 Retained earnings 1,306,288 897,351 Proposed dividend - 581,525 Shareholders' funds 19,124,240 17,810,373 Non-controlling interest 77,927 67,223 Total equity 19,202,167 17,877,596 Represented by: Assets Fixed and intangible assets 3,543,505 3,680,942 Investment assets 69,521,895 63,916,237 Insurance assets 7,215,907 7,007,477 Cash and cash equivalent 5,879,354 5,967,017 Other assets 4,462,176 3,070,936 Total assets 90,622,836 83,642,609 Liabilities Insurance liabilities 56,104,668 50,411,564 Borrowing 9,391,619 9,379,826 Deferred income tax 3,711,257 3,394,778 Other liabilities 2,213,124 2,578,845 Total liabilities 71,420,669 65,765,013 Net assets 19,202,167 17,877,596

20 Group Total Assets- June 2017

Other Equities, 3% NRBA, 17% Equity Bank, 13%

Associate, 7%

Money Market, 8% Fixed Income, 30% Property, 16% Unit Trusts, 7%

Equities continue to exhibit recovery against a slump experienced in 2016.

21 AUM up 14% to Shs 124bn

130,000 124,458

108,889 110,000

90,450 90,000

70,000 1.0% 1.0% 54,536 Figures in Shs Millions Shs in Figures 50,000 36,295

30,000

10,000 2013 2014 2015 2016 June-17

22 3.1. Performance Breakdown

23 Gross Earned Premium and Fund Management Fees

Total GEP & Fund management fees 11.7bn

Life Assurance GI Kenya Regional GI AMC Britam Property Kenya 5.5bn 3.9bn 1.9bn 453mn 47.5mn 46.5% 33.1% 16.2% 3.9% 0.4%

South Sudan Uganda Tanzania Mozambique Malawi Rwanda 203mn 565mn 523mn 126mn 332mn 148mn

Note: The above figures do not include inter company transactions.

24 Profit Before Tax (Shs)

Profit Before Tax 1.3bn

Life Britam Corporate Assurance GI Kenya Regional GI AMC Property 179 mn Kenya 46.9mn 102mn 182.4mn (66.5mn) 838mn

South Sudan Uganda Tanzania Mozambique Malawi Rwanda 48.1mn 65.6mn 42.8mn (33.2mn) (6.3mn) (15mn)

25 Key Ratios: GI- Kenya & GI Regional

Jun-17 Jun-16

General Insurance Kenya GI Kenya Ratios Opex ratio (as reported) 44% 26% Opex ratio (without debtors provision/write back) 33% 31% Loss ratio 59% 57% Commission ratio 9% 11% Combined ratio 112% 93%

General Regional GI Regional Ratios Opex ratio 61% 55% Loss ratio 48% 49% Commission ratio 7% 8% Combined ratio 116% 112%

31 3.2. Embedded Value • Update on EV • Notes to EV

32 Embedded Value (EV)

Embedded Value (EV) Dec-2016 Jun-2017 % Change Shs 000s Shs 000s % Adjusted Net Worth (ANW) 6,453,340 7,529,568 17% Value of Inforce (VIF) 5,860,583 7,218,160 23% Embedded Value (EV) 11,093,378 13,299,697 20% Increase in EV 552,385 2,206,320 Dividend Paid 210,000 0 RoEV (Return on EV) 7.2% 19.9%

• EV is the net assets of the company plus the value of future profits from business sold and allowing for cost of holding required capital.

• Gives true worth of life company by assessing the value of business written.

33 Embedded Value Notes

• The Value of Inforce (VIF) has increased 23% from Dec 2016. This is expected to pick up over the year as New Business sales are achieved. Also the changeover in regulation means the more conservative margins are released in the future. This is also as a result of the change in expense assumptions as we revised the allocation of expenses between LOB’s. • The Cost of Capital has increased by Shs 227 million. This has mainly been driven by the exclusion of DA Assets from the rest of the portfolio of Life Assurance Assets when calculating Market Risk Capital. • The Regulatory solvency calculation does NOT take into account Shs 3.74 billion worth of net assets (intangible assets, fixed assets and mark to market adjustments on asset values). • Overall, there has been an increase in EV of Shs 2.206 billion (From Dec 2016 to June 2017). • Embedded Value Earnings = KES 2.206 Billion, Return on EV as at 30 June 2017 was 19.9% compared to 7.2% for full year to 31 December 2016.

34 3.3. Asset Management

35 Business Split

• Business is split between institutional and retail divisions.

• Institutional is RBA Pension Fund and Insurance asset management.

• Retail business is unit trust, cash management, wealth management, white labeled products and unitized property.

• Regional expansion on the cards; as briefed last time we recently launched our Uganda operations.

36 Margin Splits

Premium products Low margin, high Specialized (>100bps fees) volume products products (20bps – 90bps (>200bps fees) fees)

 Collective  Pension Business  Unitized Investment Property/Real Schemes  Insurance Estate Business  Wealth  Management  White Labelled Products

37 3.4. Property

38 The Property Opportunity

• Growth of the middle class leading to increased consumer spending.

• Strong expatriate presence in Nairobi.

• Under-served neighbourhoods

• Entry of Multinationals needing office space

• Devolution presents an opportunity within the counties

• Improved business and political climate

39 Strategy- Planned projects

Ongoing Projects Hospitality/ Serviced Mixed use Apartments - Kileleshwa - Kilimani (Business Case (Construction Completed) on-going)

Residential Commercial Offices - Mlolongo - Britam Tower (Business Case (Construction Completed) completion and - Ngong currently leasing)

Retail FY17 Projects

40 Britam Tower

• Practical completion achieved and occupation certificate granted

• Total Lettable Area- 350,000 sqf

• Target rentals:

• Retail space – Shs 220 per square foot

• Office – Shs 140 per square foot

• Car park – Shs 12,000 per bay

• Rent review – 7.5% per annum

• Initial Service charge – Shs 30 per square foot

• Lease term – 6 years

• Expected Occupancy by Dec 2017: 40%(discussions progressing well with a number of blue-chip tenants)

41 Kilimani Serviced Apartments - Progress

Excavation works for apartments Concrete bases Completed works Foundation columns Foundation walling

Concrete ground slabs

Ongoing Boundary wall Works Sample unit

17% of the contract spent

Progress 10% of construction works done

8 % of construction cost paid

We have zeroed in on 3 Operator international and 1 local operator Selection and are undertaking DD to settle on one to operate the development

43 Kileleshwa Mixed Use Development

• Initial concepts and business plan have been completed and await approval by the board.

• Total GLA of the mixed use development is 53,700 m2 broken down as:

• Retail- 13,900m2 • Offices- 10,600m2 • Residential – 13,000m2 • Hotel & Serviced Apartments- 16,200m2

• 49% of the retail GLA has been reserved inclusive of the anchor tenant. • The residential apartments will be sold on a sectional basis. • The hotel will be leased to a regional operator and discussions on terms are at an advanced stage. • Office tower will be leased in multiples of 250m2. • Construction expected from H2 2018.

44 Mlolongo Housing Development

• Initial concepts and business plan have been completed and await approval by the board.

• The development comprises 2 and 3 bedroom apartments designed in 9 green/ landscaped courts of 32 units each.

• The 2 bedroom apartments are 90 m2 each; the 3 bedroom apartments are 125m2 each and the 3 bedroom with DSQ are 133 m2 each.

45 THANK YOU

With you every step of the way