This article is part of a series sponsored by Britam.
Since breaking ground in Kenya in 1965, the British-American Insurance Company Kenya (currently known as Britam), has grown from a home service based firm to one of the region’s leading insurance providers with subsidiaries in at least 5 other countries. Where did this journey begin?
Humble Beginnings
The company was first incorporated in 1920 in a place called Nassau, the capital city of the Bahamas, an island with a recorded population of less than 350,000 people – according to the latest World Bank Report. At the time, Bahamian natives were leaving the island by the hundreds to look for better living standards in what was then, the recently established city of Miami.
British-American did not know it by then, but a few years after the company’s inception, hurricanes would pass through the region, prompting civilians to, once again, leave the island in groves. By 1928, thousands of locals had left the island to seek refuge in Miami.
Setting up shop in an accident-prone area may not seem like a good idea for any insurance company due to the obviously high risk of claims. That, added to the fact that, the people leaving the island were poverty-stricken locals with little or no prospects of actually becoming clients, made for a pretty weak case.
Britam shrugged off and set up shop anyway. Besides, major hurricanes only hit the region every 12 years or so.
After establishing its insurance footprint in the region, the company decided to expand its reach internationally, focusing mainly on British Commonwealth territories. In 1965, it became one of the first financial institutions of its kind in Kenya. During that time, it opened up its first local branch office in Nairobi under the incorporated name of British-American Insurance Company Kenya Limited (Britak).
The Company reports that in 1979, a Kenya government directive required all foreign-owned insurance providers to be incorporated locally. With these rules in place, the insurer would have some a firm foot-hold within the region.
By 1980, the company had 29 employees and 60 agents. Even with its limited resources and seemingly insufficient man-power, British American continued to grow.
The firm celebrated its 21st anniversary on January 1st, 1986. 5 Years later, the company celebrated its 26th anniversary (1991). On the 1st of January, 1995, British American commemorated their golden Jubilee as they celebrated their 75th anniversary.
On the 1st of January 1997, the company’s foreign equity was acquired by the British American Insurance Company as part of a regional growth strategy of the British American Group.
In 2004, a share-swap agreement was made between two of the company’s subsidiaries, enabled British American Insurance Company to move to British American Investments (BAI). The latter gave birth to British-American Asset Managers (BAAM). Based on the success of the Asset Management branch, the firm decided to reorganize its structure, a move that took effect in January 2007.
In 2009, Britak and BAAM formed a partnership under the name British-American Investments Company Kenya Limited.
Tough Times
Between 2010 and 2011, Britak was going through some tough times. The company reports that its investment portfolio was overexposed during that period, causing it to make pre-tax losses of up to KES 1.7 billion. According to a profit warning issued by the Group’s Board of Directors in December 2011, Britak blamed its poor performance on the volatility of the Kenya shilling against other currencies, prevailing inflation, high interest rates and the deteriorating global financial market.
The Board of Directors noted that the harsh market environment led to the company’s poor performance of quoted equities where the Nairobi Securities Exchange (NSE) plunged 31.4% in 2011.
Bright Future
Despite millions of shillings in losses and adverse economic conditions, the Group still managed to pull through. With what the firm termed as a strategic shift towards more earnings, British-American Investments managed to post an 8000% profit in investment income, gaining KES 2.7 billion for the six months to June, 2012 from 3.8 million the previous year.
So how did they do it? According to Group CEO, Benson Wairegi, the Group rejuvenated their earnings through fixed income investments and better liquidity management. This led to the 17-fold growth in the firm’s pre-tax profit. Wairegi has since said that that the company plans to reduce its concentration on the capital markets, instead, focus on and property and fixed income investments in order to reduce what the CEO terms as volatility in earnings from the NSE.
Britam Today
On September 11th, 2012, Britak officially unveiled its new brand identity. The firm changed its name to Britam, a name that will be adopted by all of the company’s subsidiaries. “Today we are unveiling our new corporate identify, which will in effect put this organization in a more strategic position to address, meet and even surpass the demands of a fast changing operating environment and customer sophistication,” said Wairegi. Speaking during the official announcement ceremony, he noted that the rebranding would also create a unified culture across all business units and countries of operation.
The company, which has been known as Britak in Kenya for close to 30 years, will now be known as Britam, and its logo will respectively change. The Group announced that it will retain its legal name, British American Investment Company Kenya Limited, as listed at the NSE.
The company reports an asset base of over KES 25 billion. Currently, 39% of the company’s portfolio is invested in other company Equities while 7% is invested in real estate. The remaining 54% is split between Unit Trusts, Fixed Income Securities, Cash Deposits and other assets.
The British-American umbrella currently covers several regions in various parts of the world and has branch offices in London, Kenya, Malt, Mauritius and Uganda.
Keep reading Pesatalk to find out how and why the company made the shift from Britak to Britam.