BIC: 40 years of making it happen
Botswana insurance Company (BIC) is as old as the local insurance industry. The largest short term insurer in the country has reached 40 years of operating as a business. As they celebrate the present, the company has readied itself for the future and the next forty years look promising.
The BIC story in the words of Managing Director, Johann Claasen, is told in three parts:
THE PIONEERS – These are the people that started with a vision for BIC. They wanted to provide protection that would not only create peace of mind for the individual but would help businesses sustain themselves and have some form of business continuity, if losses were incurred.
THE COUNTRY – They also chose Botswana which at the time was a country which had not reached its peak but with good sound governance, a plan for socio economic development, visionary leadership and a solid reputation for being a peaceful nation, there was certainly a sense of hope and confidence that Botswana would one day surface and create an impression on the global map.
“We are proud to be a local brand that carries the name of this country and spreading it beyond our borders,” said Claasen. The road to 40 years has been a roller coaster and the company has achieved tremendous growth over the years, explained the MD.
THE PEOPLE – Our customers of which we have 17000, “we are proud to have loyal customers that have been with us since BIC’s first 10 years – your belief and commitment in BIC is important.
Claasen thanked the team at BIC as well as the Brokers who make the insurance industry to tick. The future is certainly bright for BIC as the company has accommodated and adopted latest technologies to ensure that services are at the click of a burton away for customers.
A thankful managing director, Claasen, told the gathering that: “Together we have turned one idea into a company that empowers people to feel at ease knowing that if they had to encounter a loss, they are covered. We have empowered our intermediary distribution partners to build sound, integral business that add to the enrichment of Batswana and to the growth of not only the private sector but to the other socio development landscape. We have given our staff the platform to reach their full potential and they know that they have what is the ability to make it happen in their own lives.”
The company is now focused on service delivery a focus on getting customer feedback and market research for client evolving requirements, faster claim turnaround times, shorter convenient processes and multiple convenient points of payment such as mobile money and on the newly launched website.
BIC aims to be more relationship driven in the future, with partnerships between brokers and agents, strategic affiliations with Reinsurers and industry leaders, media and bancassurance growth.
New products will also drive growth with product innovation such as cyber crime insurance and more participation in other markets gaps that the company has identified.
BIC is also focused on Corporate Social Responsibility, supporting partners such as Cancer Association; The Botswana Society; Dignity Foundation; Happy Boys an d various donations and sponsorships and being part of a monthly sanitary pad drive.
BIC is now a subsidiary of Masawara Plc, an AIM listed company with interests across the continent. BIC opened its doors for business on the 12th February 1975, aiming at providing insurance solutions for general insurance and life assurance business. The company originally had two shareholders being Botswana Development Corporation (BDC) who held a 51 percent stake and JH Minet and Company Limited of London who held the remaining 49 percent.
THE BIC CONTRIBUTION TO THE DEVELOPMENT AGENDA
According Claasen, BIC is not just a private company interested in making profits. He is of the view that they are a socially responsible company that is duty bound to contribute to the country’s development agenda. He linked the role of the BIC to some of the wider agendas of Botswana.
He pointed out that they are aware that government and other stakeholders are working hard to push the job creation drive. He said they continue to support government initiatives such as the internship programme.
He said they provide internship to various graduates including those from an insurance background, finance, marketing, information and technology, administration and other disciplines. He said they currently employ hundreds of citizens around the country especially at their centres in Gaborone, Francistown and Maun.
He also drew interest on the subject of diversification. Claasen said as an industry, the insurance sector has the potential to help government diversify the economy which is heavily dependent on mining, especially dimaonds mining. He said they keep on coming with new products that could motivate diversification from the insurance perspective.
Although the insurance market penetration in Botswana is only estimated at 3.5 percent, Claasen said the new industry laws will soon reveal more opportunities for the sector players.
The BIC Managing Director was happy to also report that his company continues to play a big role in the education sector. He said they are working with several institutions of higher learning to ensure that modules related to the insurance industry are tailor made for the industry. He said they are currently working with the Botswana Accountancy College (BAC) to produce an insurance module.
Business
LLR transforms from Company to Group reporting
Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.
The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.
At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.
The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.
“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.
The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.
In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.
“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.
Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.
Business
Botswana’s Electricity Generation Dips 26.4%
The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.
Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.
Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.
Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.
Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.
The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.
The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.
In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.
Business
MMG acquires Khoemacau in a transaction valued at P23Bn
MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.
On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.
Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.
In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).
On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.
MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.
On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.
The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.
On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.
The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.
Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.
Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.