CHAIRMAN’S REPORT BRITAM HOLDINGS PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2020 1 BRITAM HEAD OFFICE: HOLDING PLC BRITAM TOWER, HOSPITAL RD, UPPER HILL INTEGRATED REPORT & TEL: (254-20) 2833000, (254-703) 094000 FINANCIAL STATEMENTS EMAIL: [email protected] 2020 KENYA | UGANDA | TANZANIA RWANDA SOUTH SUDAN | MOZAMBIQUE | MALAWI TOWARDS CUSTOMER CENTRICITY TO GROW VALUE FOR CUSTOMERS AND SHAREHOLDERS BRITAM HOLDINGS Plc INTEGRATED REPORT For the Year ended 31 December 2020 2 CHAIRMAN’S REPORT CONTENTS 3 CONTENTS 01 | ABOUT THIS REPORT ...................................................4 05 | OUR CONTROL ENVIRONMENT ..................................51 Britam 2020 Integrated Report ..............................................................4 Our Enterprise Risk Management Framework ......................................51 Reporting Scope and Boundary ..............................................................5 The Elements of Our ERM Framework ...................................................52 Materiality ....................................................................................................6 Overview of Our Principal Risks ..............................................................53 Assurance ....................................................................................................6 Other Material and Emerging Non – Financial Risks ............................54 02 | GROUP OVERVIEW .........................................................7 06 | CORPORATE GOVERNANCE ..................................57 Who we Are ................................................................................................7 Statement of Corporate Governance ......................................................57 Our Philosophies .......................................................................................7 Shareholding Information ............................................................................65 Our Footprint .............................................................................................8 Director’s Renumeration Report ..............................................................66 Our Structure .............................................................................................9 Legal Auditor’s Report ................................................................................69 What we Do .............................................................................................10 Five Year Financial Performance summary .........................................11 07 | OUR FINANCIAL STATEMENTS ....................................70 Report of the Directors ............................................................................. 71 Our Operating Environment ................................................................12 Statement of Directors’ Responsibilities .................................................74 Chairman’s Statement ............................................................................13 Independent Auditor’s Report .................................................................. 75 Group Managing Director’s Statement ..............................................19 Financial Statements .................................................................................... 81 Our Leadership ........................................................................................24 Notes to the Financial Statements ........................................................... 90 Our Executive Management ..................................................................27 08 | OTHER CORPORATE INFORMATION ........................201 03 | VALUE CREATION ........................................................28 Notice of the Annual General Meeting ................................................ 201 How We Create Value ............................................................................28 Corporate Information .............................................................................209 Our Business Model ...............................................................................29 Our Capitals .............................................................................................30 Our Stakeholders ....................................................................................31 ABOUT BRITAM HOLDINGS Plc Our Material Matters .............................................................................38 Britam Holdings Plc is a leading diversified financial Our Strategic Response..........................................................................42 services Group listed on the Nairobi Securities Exchange. The Group has a presence in seven countries in Africa “Go for Gold” 2016 – 2020 Strategy Highlights...............................42 namely: Kenya, Uganda, Tanzania, Rwanda, South Sudan, Our Strategy for the Future (2021-2025 Strategic Period)............43 Mozambique and Malawi. Our Sustainability Focus ........................................................................45 Our integrated report is our primary report prepared Corporate Social Responsibility ...........................................................46 for all stakeholders, and includes information relating to our external operating environment, business model, Our People ...............................................................................................47 stakeholders, key risks and opportunities, governance and leadership, strategy and other material matters. 04 | FINANCIAL REVIEW ....................................................49 ABOUT THIS REPORT As Britam Holdings Plc, we strive to continuously incorporate the 2016-2020 Strategic Focus principles of integrated thinking Profitable Growth Operational Excellence into our business and ultimately our Customer Service Enabling transformation reporting. The goal is to support our Innovation key stakeholders understand how we define, measure, and report on value Our Stakeholders creation. Shareholders and Strategic Partners Investment Community Employees Britam 2020 Integrated Report Regulators & Financial Advisors This integrated report is a demonstration of our Government Agencies Other Internal Stakeholders commitment to and strategy for creating value for our Customers The Media stakeholders. This report contains information on our Suppliers The Wider Community financial and non-financial performance for the financial year 2020. Our integrated report is our primary report prepared for Our Material Matters the providers of financial capital, and includes information relating to our external operating environment, business Regulatory Environment model, key stakeholders, key risks and opportunities, material matters, and strategy. International Business Performance Investment Asset Performance We are committed to the principles of Integrated Operational Efficiency Reporting as they align with sustainable, long term value creation and with our mission to offer our customers Fraud Risks financial security EVERY STEP OF THE WAY. 2021-2025 Strategic Focus Target audience Re-ground business Customer at the heart This Integrated Report is our primary report to our investors. However, it also contains information relevant to Organise for the future Embed customer centricity other key stakeholders. Leverage data & analysis Feedback Transform for future Led by new segment units At Britam Holdings Plc, we value your feedback as we Optimise approach to customer Unlock next tier of customers endeavour to provide accurate, transparent and balanced Forge strategic partnerships information to our stakeholders. Expand regional footprint Enanble the journey Address performnace challenges We invite you to contact the Investor Relations Department on +254 0705 100 100 or [email protected] Turnaround key cost drivers Shift investment strategy should you have any questions. 4 ABOUT THIS REPORT BRITAM HOLDINGS PLC INTEGRATED REPORT AND FINANCIAL STATEMENTS 2020 ABOUT THIS REPORT BRITAM HOLDINGS PLC INTEGRATED REPORT AND FINANCIAL STATEMENTS 2020 5 Reporting Scope and Boundary This Integrated Report covers the period 1 January to 31 December 2020, and was compiled with INTEGRATED REPORTING information that the Board of Directors (the Board) BOUNDARY (risks, and Management (Executive Committee) believe is opportunities and outcomes in relevant and material to provide an integrated view of the Group’s performance. terms of the IIRC<IR> Framework To reflect how we create value, this report focuses on the performance of the Group across our geographical footprint covering Kenya and the International markets: Financial reporting Kenya businesses boundary (control and significant influence in Our primary operations are in Kenya terms of IFRS) and currently generates over 70% of the Group’s Gross Earned Premiums and Fund Management Fees. The Kenyan operations offers the following: Life Assurance, General Insurance and Asset Britam Holdings Plc Management services. Subsidiaries Our strategic portfolio investments are also in entities incorporated in Kenya. Strategic Portfolio investments International businesses Shareholders and Investment Community The Media Our growing international operations Regulators and Government Agencies are made up of the Group’s subsidiaries Customers in the following countries: South Sudan, Suppliers Uganda, Rwanda, Tanzania, Malawi and Strategic Partners Mozambique. Employees We offer General Insurance solutions in Financial Advisors these countries