#1Britam With you every step of the way Britam Holdings Plc FY21 Results Investor Presentation 30 March 2022#2Britam With you every step of the way A Disclaimer The information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. It is the responsibility of any person publishing, downloading or communicating the contents of this document or communication, or any part thereof, to ensure compliance with all applicable legal and regulatory requirements. The content of this presentation does not represent a prospectus or invitation in connection with any solicitation of capital. Nor does it constitute an offer to sell securities or insurance, a solicitation or an offer to buy securities or insurance, or a distribution of securities in any country or jurisdiction where it is contrary to local law. Such persons should inform themselves about and observe any applicable legal requirement. 2#3Britam With you every step of the way Content مما Group Overview Operating Environment Strategy Execution Financial Performance Priorities & Outlook#4Britam With you every step of the way 01 Britam Holdings Plc FY21 Results Presentation Group Overview 4#5Britam With you every step of the way Well Positioned Across our Footprint for Emerging Opportunities We are a regional diversified financial services Group... Britam is a leading diversified financial services group listed on the Nairobi Securities Exchange with presence in seven countries. Britam Kenya - Headquarters . Est. 1965 The #1 insurer in Kenya with 13% overall market share: 22% Life (#1) 6% GI (#5) Britam Uganda Est. 2010 • 10% market share (#4) . Britam South Sudan Est. 2012 • 38% market share (#1) Britam Malawi • Est. 2014 • . 13% market share (#2) • Britam Rwanda Est. 2012 5% market share (#5) Britam Mozambique Est. 2014 4% market share (#6) Britam Tanzania Est. 2014 5% market share (#36) Solutions: A Life Assurance General Insurance Health Insurance ST Retirement Planning Asset Management Property 5#6Britam With you every step of the way The Group Maintains Leadership in a Competitive Industry # 1 insurer in Kenya by Gross Written Premiums (GWP) # 1 Life Insurer in Kenya 208 +4% 229 +6% +2% 233 233 74% 76% AKI 76% 3% 77% 12% 11% 12% 11% 10% 13% 13% 14% 14% 13% 2017 2018 2019 2020 Q3-2021 Others Peer #2 Britam • Industry leadership in Combined Life and General Insurance with Share of GWP at 13%* • *IRA Q3 2021 Statistics AKI AKI AKI A AKI AWARDS 2020 AKI AKI ALFAWARDE 2921 AKI AWARDS 2021 AKI AWARDS Maintained Association of Kenya Insurers (AKI) Life Company of the Year Award for 15 years in a row 6#7Britam Our Board Evolving in line with Business Needs With you every step of the way Mr. Kuria Muchiru Chairman Mr. George Odo Representative of AfricInvest, III SPV 1 (Corporate Director) Ms. Marianne Loner Non-Executive Director Dr. Peter K. Munga, EGH Non-Executive Director Mr. Jimnah M. Mbaru, EBS Non-Executive Director Ms. Josephine Ossiya Independent Non-Executive Director Ms. Caroline Kigen Independent Non-Executive Director Mr. Mohamed S. Karama Non-Executive Director Ms. Winniefred Jumba Company Secretary Mr. Edouard Schmid Non-Executive Director 7#8Britam With you every step of the way Our Executive Team Aligned to Drive Customer Centricity Ms. Carol Misiko Mr. Charles Njuguna Group Managing Director (Ag.) Mr. Ambrose Dabani Retail Director Risk & Internal Audit Director Ms. Diane Korir Customer Experience Director Ms. Evah Kimani Partnerships and Digital Director Mr. Jackson Theuri Corporate Director Ms. Evelyne Munyoki Human Resources Director Ms. Catherine Karita Strategy & Investor Relations Director Mr. Kenendy Aosa International Business Director Ms. Mulalo Moroe Legal & Compliance Director Mr. Saurabh Sharma Emerging Consumers Director Mr. Zom Chizura AMC Director 8#9Britam With you every step of the way 02 Britam Holdings Plc FY21 Results Presentation Operating Environment 9#10Britam With you every step of the way Our Operating Environment, Macro Indicators Shaping Performance Kenya and the Regional Markets GDP Continue with Recovery Post - 2020 Mixed Market Performance by Listed Equities - NSE 20 2021 2022 5.0% 4.7% 3.5% 3.7% 3.4% 3.7% 1.2% 10.2% 7.1% 5.4% 4.3% 3.0% 2.4% 2.3% 2,100 2,050 2,000 1,950 5.1% 1,900 1,850 1,800 1,750 1,700 SSA Kenya Uganda -5.4% S. Sudan Rwanda Tanzania Malawi Mozambique 01-Apr-21 01-Jan-21 01-Feb-21 01-Mar-21 01-May-... 01-Jun-21 01-Jul-21 01-Oct-21 01-Aug-21 01-Sep-21 01-Nov-21 01-Dec-21 01-Jan-22 01-Feb-22 01-Mar-22 Inflation Across our Markets not Expected to Change significantly - (%) 24.0% 23.0% Bond Yields remain attractive especially LT - (%) Kenya Yield Curve Movement (%) 6.1% 5.0% 5.0% 2.2% 14.0 9.5% 13.0 9.0% 12.0 6.2% 6.5% 11.0 4.9% 3.2% 3.4% 2.4% 10.0 31-Dec-21 30-Jun-21 31-Dec-20 9.0 8.0 7.0 6.0 Tanzania Malawi Mozambique 91 1 35 79 11 13 15 17 19 21 23 25 day 10 Kenya Uganda S. Sudan Rwanda Source: IMF, NSE, CBK 2021 2022#11Britam With you every step of the way Our Operating Context, Dynamic, Demanding Adaptability and Focus : Support to clients and intermediaries Focus on performance and profitability Britam Shift in ways of working Embedding a customer centric model Navigating Business Transformation (Governance and Management) • ° Impact of Covid-19 on clients and businesses Investment Climate Economic recovery driving uptake services Increasing focus on adoption of digital channels Sections of customer base yet to fully recover Performance of listed equities Shift towards fixed income Property performance yet to recover. Dynamic Macro - Environment Growth with GDP recovery across markets Exchange rates remain under pressure Inflation pressure remains . Competitive pressure Increasing competition from both traditional and non-traditional players Rivalry among players sustaining pressure on margins. 11#12Britam With you every step of the way Our Resilient Operations Retains Momentum and Drive Profitability Customer-centric model in place to deliver #OneBritam experience Kenyan Businesses are now aligned along the fully functional and resourced segments. Lean executive team in place • • • Growing topline & Improved Efficiency لكا Investments Strategy Growing Returns 12.8% growth in Gross Earned premium and Management fees 2.1% Drop in Normalized Operating Expenses Drop in Normalized Opex ratio to 32% (36% in 2020). 15.7% growth in investment Income Portfolio rebalancing to reduce the volatility of earnings in progress Outsourced management of Kilimani Serviced apartments to optimize returns. Continued growth & profitability of international businesses 25.5% contribution total Gross earned premiums (GEP). 3.3 percent growth of regional units GEP OIO Leveraging on technology Refreshed our IT strategy in line with our new business strategy. Continued enabling digital capabilities for our customers and intermediaries on our platforms Resourcing of new capabilities in line with. new IT strategy. Resolving areas of Concern Improved motor underwriting and focus on new business lines Improving property occupancy favorable to valuations. Britam Tower closed the year at 86% ahead of 75% year-end target. HF-65% drop in share of loss 12#13Britam Our Business Model Continue to Focus on New Areas of Growth With you every step of the way Strategic Partnerships Focus on Emerging Consumers Support to Our Retail Customers Support to Corporate Customers Banca-assurance partners Health providers M-tiba Telcos Vodacom Tz MTN Uganda - Others Cellulant, Kava, Koa, Little cab, Bi- smart Leadership in unlocking access to insurance for the unprotected population segments - Largest micro-insurer (IRA) Agricultural organizations. Kinga ya Mkulima - KTDA - Soko Afya Twiga foods Afya Tele Trusted to support families' health, education, and businesses with a wide array of financial solutions . COVID-19 Cover Continue to support business and institutions to achieve their financial goals Afya Pension - Post Retirement Medical Cover 13#14Britam With you every step of the way 03 Britam Holdings Plc FY21 Results Presentation Strategy Review 14#15Britam Strategic Focus: The EPIC² ..#OneBritam Strategy With you every step of the way • We will transform Britam by putting Customer needs at the centre of everything we do Our Customers will experience "One Britam"; We will deploy deep customer insights and data analytics to understand their needs and provide solutions they want. • We will leverage our People, Technology and Culture and enable our partners to deliver meaningful interactions, satisfying experiences, all the time The 2021-2025 Strategy is about Delighting the Customer EPIC²..#OneBritam 15#16Britam Strategic Focus is about Offering Customers an EPIC² Experience With you every step of the way E Employees Build success from within and create a culture of excellence P Partnerships < Cultivate trust to enhance partnership experience | Innovation Create more value to our customers Clients C 2 Conduct Put customers first, think client in all decision making Treating customers fairly 16#17Britam Our EPIC² Strategy is Transformational from the Core With you every step of the way Our Strategy draws on a transformational vision to grow customer base through focus on customer centricity - while strengthening our foundations Reground the business Driver Customer-Centric Fix the basics and fuel the journey Transformation οιοι ιο 1010 101101 010 о Organise around the customer Leverage technology Turnaround key cost drivers Shift investment strategy Embed customer- centricity 6 EM P& D Retail Corp. Forge strategic partnerships Optimise approach to customer Unlock next tier of customers Drive international growth 17#18Britam With you every step of the way 04 Financial Performance Britam Holdings Plc FY21 Results Presentation 18#19Britam Summary Results, Supported by Topline Growth & Investment Income With you every step of the way Gross earned premiums and Fund management fees Investment Income (Interest & dividends) Operating Expenses Profit Before Tax Normalized Operating Expenses* Normalized Profit Before Tax* * Normalized excludes the one-off of Shs 3,243 million (2020 - Shs 5,207 million) 會 +12.8% Up YoY, to Shs 32.5 billion +15.7% Up YoY, to Shs 10.9 billion Down -15.8% YoY, to Shs 11.3 billion (Opex Ratio 44% (2020 - 57%) Shs 1,011 million (FY20 LBT Shs -9,698 million) Down 2.1% YoY, to Shs 8.1 billion ― (Opex Ratio 32% (2020 - 36%) Shs 4,254 million (FY20 LBT Shs -4,491 million) 19#20Britam Improving Top-line and Investment Income Sustaining B/Sheet Growth With you every step of the way GEP and Fund Management Fees - Shs billions +8% 28 24 25 28 2017 2018 2019 29 29 2020 +13% 33 GEP Contribution Kenya and Region - Shs bn / % 14.20 9.52 31.84 8.13 Interest and dividend Income- Shs billions +25% 9.40 6.67 6.97 4.45 2021 2017 2018 +16% 10.87 2019 2020 2021 Total Assets - Shs billions +12% 137 125 99 104 +12% 153 Kenya - 30% Life - 44% Int'l GI - 26% 2021 Total 2017 2018 2019 2020 2021 20 GEP#21Britam PBT Driven by Revenue growth and investment returns With you every step of the way 1,933 -4,491 5,207 7,076 110% 195% 123% 1,065 |(1,663) 4,254 112 (315). 537 (2,000) (1,243) 1,011 -9,698 Dec-20 Invest. Dec-20 NEP LBT Losses LBT Exc. Invest Comm & + FM income Other inc (FY20) Net Claims & Int Opex & finance costs Comm expense Share of ass Dec-21 Invest. Bus Dec-21 PBT Exc. Losses Transformation PBT (FY21) Results impacted by: • • Growth in Net earned premiums Claims and interest from growth and higher units returns • . Increase in Investment Income (Interest, fair value gains) Growth in Commission paid inline with GEP . Increase in commission and other income Drop in the share of loss from HF 21#22Britam Shift in investment strategy favors realignment to stabilize returns With you every step of the way Shs billon 82.2 7.6 +1% +28% +11% 14.5 16.4 91.6 18.7 16.6 7.7 2020 2021 Fixed income Deposits and cash Equity Property The increase in assets driven by:- Fixed Income - Increased allocation Equities - Fair Value Gains Shift in Investment Strategy with outcomes below:- Fixed Income + 9.4 billion Equities +4 billion Property - flat +153k Deposits and Cash flat +94k 22#23Life Assurance Embedded Value Recovery Supported by Investments EV records recovery achieving an annualized growth of 6.6 Percent Britam With you every step of the way 16,129 1,021 107 664 (389) 1,157 636 (2,127) 17,199 1 2 3 4 LO Total EV -Dec-20 Expected Return Value of New Operating Operating Economic Economic business Experience Assumption Experience Assumption Variance Change Variance Change Exceptional items Total EV - Dec-21 1 ■ Positive EV earnings from expected releases in margins in the reserves. 3 ■ Actual operating experience worse than anticipated mainly the impact of lapses. 2 ■ Positive value of new business from profitable business written. 4 ■Improvement in investment experience. 50 Exceptional items result from opening adjustments to reserves and PVFP to account for a change in tax application on annuity benefit payments; change in inflation risk premium from 4% to 1.5% to reflect experience; and a change in the PVFP yield curve from yield to maturity curve to a derived spot curve. One-off costs were also incorporated. 23#24Britam With you every step of the way Regional Gl Units Continue to Support Group's Total GI Profitability FY 20/21 GEP Growth +11% 17,644 15,827 1,817 GEP Dec 20 Growth GEP Dec 21 Total GI GEP Growth of 11% GI Kenya +20% Gl regions +3.3% 33 Combined GI PBT - Shs mn 562 595 PBT -GI Kenya PBT -GI PBT Total Gl Regions Total GI PBT Contribution GI Kenya -6% - Shs 33 m Gl regions 94% Shs 562 m - - 24#25Britam With you every step of the way -3,437 LBT Dec- 20 Actual Life and GI Deliver Strong Underlying Results Life Business Underlying PBT 169% 2,371 187% 2,985 614 GI (K) Underlying LBT -91% 374 (86) 288 +68% 483 133 33 317 Dec-21 Transformation Dec-21 PBT Cost PBT- Actual. Underlying Dec-20 PBT Actual FV Gain Dec-20 underlying Dec 2021 FV Loss Transformation Dec-21 Actual Cost PBT- Underlying Life PBT Growth Actual PBT +169% Underlying PBT +187% GI Kenya PBT Growth Actual PBT - down 91% Underlying PBT +68% 25#26Britam With you every step of the way Key Metric Key Ratios for the Group records improvement Group Life FY21 FY20 FY21 FY20 FY21 GI Kenya GI Regions FY20 FY21 FY20 Opex Ratio 44% 57% 26% 25% 35% 37% 45% 39% Underlying 32% 36% 21% 23% 31% 37% Loss Ratio N/A N/A Underlying ROE 0.4% - 53% Underlying - ROE 15% - 18% Solvency Underlying 65% 65% 60% 42% 68% 68% 119% 136% 149% 160% 119% 136% 149% 160% 13% 24% 26#27Britam Key Properties With you every step of the way Britam Tower TO SRITAM Kilimani Serviced Britam Centre Apartments Britam Centre Grade A 31 storey property with EDGE certification as a green building. The occupancy level beat 2021 target of 75% to close at 86% in Dec 2021. Hotel Serviced Apartments Launched in Q1 2022 under the Brand Somerset. Grade B, 8 storey & 8,600 Sq m² building located at the upper hill area of Nairobi. • Under management by Ascort 27#28Britam With you every step of the way 05 Priorities and Outlook Britam Holdings Plc FY21 Results Presentation 28#29Britam FY22 Strategic Priorities With you every step of the way OIIOIO 010 OO I IOIIOI Growth and Expansion Seeking opportunities for Regional Expansion Expanding our distribution Growth through Partnerships & Digital and Emerging Market Consumers Shift in Investment strategy Continue to drive optimization of returns from our investments. Strengthen solvency levels Turning around key cost drivers Deliver further cost savings from the business transformation Drive operational and cost efficiencies capitalizing on our investments in technology Organizing around the customer Continue to Embed the Customer Centricity Developing targeted, customized offerings & grow customer base. Continue leveraging strategic partnerships to drive scale, unlock the next tier of customer Leveraging on technology Optimize the current IT platform and continue with the transformation journey in line with the new business operating model 29#30Britam Outlook With you every step of the way سدا Cautiously optimistic of continued economic recovery supported by the turnaround of businesses from the adverse effects of the pandemic but risks remain from emerging challenges. Political environment in Kenya and its impact on the macro economic indicators to remain an area of focus as we approach General Elections in August Inflation rate expected to remain within the government's target. global oil prices expected to continue putting pressure on the inflation rate. 30#31Britam With you every step of the way Thank You