FINANCIAL YEAR RESULTS 2020

FINANCIAL YEAR RESULTS 2020

Agenda

Welcome Remarks BIHL Chairman

Operational Overview BIHL Group Chief Executive Officer

Financial Performance BIHL Group Chief Financial Officer

Operational Overview

Catherine Lesetedi

GCEO

4

Economic highlights

SOURCES: IMF World Economic Outlook Update, Jan 2021, Monetary Policy Committee, Feb 2021; Statistics Botswana Consumer Price Index, Jan 2021

GLOBAL GROWTH

2020 GG; -3.5%

Sub-Sahara estimate -2.6% in 2020

IMF forecast contraction of -4.9% in 2020

and 5.5% growth in 2021

2021 sub-Sahara forecast: 3.2%

LOCAL GDP

2020 Growth estimate: IMF: -9.9%;

MFED: -7.7%

2021 Growth estimate: IMF: 8.6%;

MFED: 8.8%

INFLATION

2.3% Jan 2021 (2.2% Dec 2020 )

Average annual inflation 2020: 1.9%; 2019: 2.8%

Inflation is expected to stabilise to the BOB’s 3-

6% objective range in Q2 2021

BANK RATE

3.75% Oct 2020 and maintained in Feb 2021

The BOB is expected to increase the bank rate

by 25bps to 4.00% by the end of 2021 as the

economy begins to respond to monetary and

fiscal interventions

Purpose driven 45 years unrivalled strength

Collectively engineering legacies for our clients, delivering exceptional returns

for our shareholders through service excellence in wealth and insurance management

6

100% subsidiaries

BIHL top shareholders

Sanlam 58.43%

BPOPF 18.42%

MVA Fund 3.80%

Other 19.40%

Associates

Letshego 28.05%

BICC 50.00%

FSG 37.59%

NICO 25.10%

Generating value through combined strength for

• Clients

• Shareholders

• Employees

• Partners

• Communities

Pandemic impact and response

8

Pandemic measures • SOE

• Movement restrictions

Investment climate• Volatility of global investment markets

• Downward pressure on local equites

Business Impact• All sectors except for the Government have contracted

• Reduced cover for insurance programmes

• Lending institutions expected to see a rise in bad debt provisions

Competitor pressure

Trading environment

9

Our response

HEALTH PROTOCOLS: PROTECTING

COLLEAGUES, CUSTOMERS & PARTNERS

Remote working

Safe premises

Awareness campaigns

SOCIAL RESPONSIBILITY

P5.4m Gov donation

BUSINESS IMPACT MINIMISATION

Rapid response plans

Enhanced risk management

Liquidity management

Premium holiday dispensation

Premium discounts BIC

Financial assistance to distribution partners

Solvency remained strong

Talent management focus

Group wide business development

New ways of engagingACCELERATED DIGITISATION AND

AUTOMATION

Customer experience adaptation

Advanced data analytics

Digital enablement - remote access for clients

Customer portals (BLIL & BIFM)

Safety first

Resilience and financial strength

11

In the last 5 years…

2,075

2,320 2,349

2,598

2,880

31 Dec2016

31 Dec2017

31 Dec2018

31 Dec2019

31 Dec2020

575

424

462

537

666

31 Dec2016

31 Dec2017

31 Dec2018

31 Dec2019

31 Dec2020

101

76

9699

129

31 Dec2016

31 Dec2017

31 Dec2018

31 Dec2019

31 Dec2020

475

348366

438

538

31 Dec2016

31 Dec2017

31 Dec2018

31 Dec2019

31 Dec2020

Premium income PBT Taxes paidPAT

12

343

443

404

332

358

31 Dec2016

31 Dec2017

31 Dec2018

31 Dec2019

31 Dec2020

+P30mninvested by The BIHL Trustinto Botswana communities since 2007

In the last 5 years…

Dividends paid Value of new business Embedded value

161,575

148,565 146,667

157,699

128,803

31 Dec2016

31 Dec2017

31 Dec2018

31 Dec2019

31 Dec2020

4,3004,262

4,420

4,651

4,782

31 Dec2016

31 Dec2017

31 Dec2018

31 Dec2019

31 Dec2020

13

Growth

NET INSURANCE PREMIUM INCOME

11% to P2.9bn

VALUE OF NEW BUSINESS

18% to P129mn

FEE REVENUE

11% to P109mn

ASSETS UNDER MANAGEMENT

4% to P30.3bn

14

Earnings

OPERATING PROFIT

4% to P393mn

CORE EARNINGS

4% to P426mn

PROFIT ATTRIBUTABLE TO EQUITY HOLDERS

22% to P532mn

15

42%

8%2%12%

32%

4%

Life BIFM BIC Nico Holdings Letshego FSG

Operating profit contributions

46%

7%2%6%

36%

3%

Life BIFM BIC Nico Holdings Letshego FSG

Diversified revenue across businesses, geographies and channels

2020 2019

Looking through the lens – 2021

17

Our view of the trading environment

Traditional face to face business model under pressure

Pandemic lasting longer than anticipated

Persistent challenging trading environment

Vaccine rollout brings hope for COVID-19 containment

Anticipated relief from Government fiscal restoration measures

Persistent competitor pressure including price wars

Rising unemployment

Continued pressure on household income

Inflationary pressure due to for e.g. increase in VAT, etc

18

Our strategic choices

Ambition

To be the leading client-centric, broad-based financial services Group in markets we choose to operate in

Superior client experienceBeing no 1 in all segments we service through

the relevant products, appropriate channels and ease of service through digitization

Cost optimisationSpending effectiveness integrated into

company operations

Sustained shareholder value

(ROGEV 14.5%)Seeking value adding opportunities

and managing responsibly across our value chain, ensuring compliance, governance

with close attention to risks

Returns

Clientcentricity

Innovation and transformation

Employee value proposition

Collaboration New growth opportunities

Customer centricity | Collaboration | Agility and innovation | High performance | Corporate governance

H1: Doing this better

H2: Doing things differently

H3: Doing different things

Future proof digital transformation

adapting to customer needs

Growth

19

Building a resilient business premised on growth and sustainable profits

People

• Talent and future skill development

• Safety of employees remains key

Business

• Expand our offerings and channels- Growth

- offer superior service

- focus on partnerships and increase

solution offerings

- growth opportunities by leveraging off

our echo system

- enhance capability to reach and increase

penetration in selected segments

- focus on client retention and claim trends

- Cost efficiencies

- automate and improve client experience

- build scalable cost-effective solutions

- use of analytics for better insights

Digitisation

• Execute digital strategy to:- unlock growth opportunities

- introduce more channels (reach and

ease of doing business)

- enable our distribution partners to

remotely service clients

- introduce and accelerate self service

channels for our clients

Key

Focus

Areas

Building a digitally enabled business through agile

execution… maintaining a long termism view to

performance

Financial Performance

Kudakwashe Mukushi

Group CFO

22

1,635

1,301

10935

1,511

1,140

9835

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Recurring premium Single premium Fee revenue Shareholderinvestment return

Dec 2020 Dec 2019

Revenue

BWP million

23

52%43%

4% 1%

Recurring premium Single premium

Fee revenue Shareholder investment return

Revenue

53%42%

4% 1%

Recurring premium Single premium

Fee revenue Shareholder investment return

Dec 2020 Dec 2019

24

1,689

424357

1,649

397322

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Claims and benefits Sales renumeration Admnistration expenses

Dec 2020 Dec 2019

Expenses

BWP million

25

1542

1382

1499

1649 1689

311 324 308 322 357

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Dec 2016 Dec 2017 Dec 2018 Dec 2019 Dec 2020

Claims and benefits Admnistration expenses

Linear (Claims and benefits) Linear (Admnistration expenses)

Sustainability

BWP million

26

393

532

257

129

376

437

142158

0

100

200

300

400

500

600

Operating profit Profit attributable toshareholders

Associate share ofprofit

Value of newbusiness

Dec 2020 Dec 2019

Profitability

BWP million

27

47%

7%

7%

3%

25%

4%

-7%

BLIL BIFM NICO BIC LHL FSG BIHL group expense

Profit after Tax (PAT)

28

88%

12%

BLIL BIFM

Subsidiaries contribution to OP

90%

10%

BLIL BIFM

Dec 2020 Dec 2019

29

3% 4%

23%

63%

7%

BIFM Zambia BIC Nico Holdings Letshego FSG

Associates' contribution to OP

5%4%

12%

74%

5%

BIFM Zambia BIC Nico Holdings Letshego FSG

Dec 2020 Dec 2019

30

55 55 6044

57

67 6767

59

65

3516

11

0

20

40

60

80

100

120

140

160

180


Dividends Interim Final Special

Delivering on our promises

Dividends (thebe per share)

31

162

149 147

158

129

0

20

40

60

80

100

120

140

160

180


Value of new business

BWP million

32

2,851 2,831 2,756 2,841 2,911

1,489 1,452 1,6641,811 1,871

0

1,000

2,000

3,000

4,000

5,000

6,000


Value of net assets Value of inforce business

Embedded value

BWP million

Financial position

34

25.90

14.20

4.34

26.70

15.57

4.30

27.50

15.81

4.42

29.20

16.49

4.65

30.30

17.08

4.78

0

5

10

15

20

25

30

35

AUM Total assets EV


Strong Financial Position

BWP million

35

Embedded value earnings

GEV movementBWP million

Opening

embedded

value

Expected

return

New

business

Operating

variances

Assumption

changes

Economic

assumption

changes

Investment

variances

Return on

SH assets

Change

in FV

adjustments

Movement

in treasury

shares

Dividends Closing

embedded

value

36

13.0% 11.8% 19.7% 14.4% 15.3% 18.0%

14.5%

16.4%

15.0%

15.0% 15.5% 13.5%

27.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0%

5%

10%

15%

20%

25%

30%

BIHL Group BLIL BIFM Letshego FSG BIC Nico

ROGEV Target

Return on group equity value

Engineered to deliver, as we engineer legacies

Thank you

Documents

FINANCIAL YEAR RESULTS 2020