Primetime Property : BIHL INTEGRATED ANNUAL REPORT 2022

INTEGRATED ANNUAL REPORT

Improving livelihoods

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BIHL INTEGRATED ANNUAL REPORT 2022

CONTENTS

KEY ACHIEVEMENTS IN 2022

ABOUT BIHL

	Key achievements in 2022	1
	About this report	2
	ABOUT
4
BIHL
	About BIHL	6
	Our purpose	8
	Where and how we touch
	livelihoods	9
	Timeline	10
	Our market and trends	12
14	HOW WE
CREATE VALUE

108

ANNUAL FINANCIAL

STATEMENTS

Directors' report	110
Statement of responsibility
of the Board of Directors	111
Independent auditor's report	112
Statements of financial position	117
Statements of profit or loss	118
Statements of comprehensive
income	119
Statements of changes in equity	120
Statements of cash flows	122

REVENUE

Net insurance premium income

 2% to P3,01 billion

Net recurring premium income

EARNINGS

Operating profit

é 132% to P408 million

Core earnings

ASSETS UNDER	DIVIDENDS
MANAGEMENT	Paid as dividends
(AUM)	during the year

		P405 million
7% to
é		(December 2021:
P38,5 billion		P195 million)
Final dividend proposed
	net of tax

	Our material matters	16
	Our strategy	17
	Our value-creating business model	18
	Our risks and opportunities	20
	Engaging with our stakeholders	23
	PERFORMANCE
28
AND OUTLOOK
	Five-year review	30
	Chairman's message	34
	Chief Executive Officer's report	36
	Chief Financial Officer's report	40
	Group embedded value	44
	Report of the Statutory Actuary	50

226

Basis of presentation and
accounting policies	123
Notes to the annual financial
statements	155

SHAREHOLDER

INFORMATION

Shareholder analysis	228
Shareholders' diary	230
Dividend distribution	230
Notice of annual general meeting	231
Notes to the form of proxy	234
Form of proxy	235
Definitions	236

é 1% to P1,79 billion

Revenue from contracts with customers

é 9% to P139 million

Value of new business

é 138% to P481 million

Share of profit of associates

 22% to P237 million

Profit attributable to equity holders

SOLVENCY

Business is well capitalised; required capital for the group subsidiaries is covered

7,7 times

(December 2021: 6,8 times)

P285 million

(December 2021: P200 million)

Special dividend proposed net of tax

P251 million

(December 2021: nil)

	ENVIRONMENTAL,
54	SOCIAL AND CORPORATE
GOVERNANCE
	Our long-term sustainability	56
	Our approach towards
	climate change	57
	Our people	59
	Awards	65
	Corporate social responsibility	68
	Corporate governance overview	77
	Our board of directors	92
	Our management team	96
	King IVTM application register	98
	Audit and risk committee report	104
	Activities of the other board
	committees	106

ibc

CORPORATE INFORMATION

 9% to P160 million

é 56% to P615 million

EMBEDDED VALUE

é 9% to P5,76 billion

(December 2021: P5,29 billion)

Return on group embedded value

é 16,9%

(December 2021: 11,3%)

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BIHL INTEGRATED ANNUAL REPORT 2022

BIHL INTEGRATED ANNUAL REPORT 2022

ABOUT THIS REPORT

ABOUT BIHL

REPORTING SCOPE AND BOUNDARY

This is the integrated annual report of Botswana Insurance Holdings Limited (BIHL or the company) for the year ended 31 December 2022.

This report includes material information for our stakeholders about our financial, economic, social and environmental performance and demonstrates our performance against our previously stated plans.

The content encompasses all divisions and subsidiaries of the company across all regions of operation in Botswana and our associates in Eswatini, Ghana, Kenya, Lesotho, Malawi, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Zambia and Zimbabwe.

We provide insights into matters of importance to our stakeholders, highlighting how the organisation is governed, the material matters we identified and the risks and opportunities that could impact our business. We show how these factors influence our business model, strategic objectives and future plans in creating and sustaining value for our stakeholders in the short, medium and long term.

REPORTING PRINCIPLES AND FRAMEWORK

We applied international and Botswana reporting guidelines and best practices in compiling the report, including the following:

• Botswana Stock Exchange (BSE) Listings Requirements
• International Financial Reporting Standards (IFRS)
• Botswana Institute of Chartered Accountants (BICA) Financial Reporting Guides
• King IV Report on Corporate Governance for South Africa, 2016TM (King IVTM)
• International Integrated Reporting Framework ( Framework) of the IFRS Foundation
• United Nations Sustainable Development Goals (SDGs), and
• Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)

as well as the relevant regulations and directives in force under the laws of Botswana.

The annual financial statements on pages 117 to 225 are presented in Pula, the group's presentation currency.

THEME

This is our purpose statement and is the essence of everything that we do as a business. We believe that we enhance the overall well-being and quality of life of individual and communities we operate in. Our intent as we operate is to develop strategies, initiatives and interventions that aim to enhance income opportunities, access to financial services and socioeconomic conditions for people, thereby enabling them to lead healthier, more productive, and fulfilling lives.

Read more about our purpose on page 8.

NAVIGATION

This integrated annual report was enhanced with digital navigation capabilities to assist you in moving between sections. You can do so by using the navigation icons at the top of the page or where you see one of these links:

Refers you to information available online at www.bihl.co.bw

Refers you to a page where more information can be found in this report.

MATERIALITY

This report discloses BIHL's approach to sustainability and identifies and explains the material environmental, social and governance (ESG) issues facing the group. The board has considered matters viewed as material to the business of the BIHL Group and its stakeholders. These are determined through board discussion, market research, stakeholder engagement, continuous risk assessments and the review of prevailing trends in our industry and the global economy. Sustainability issues that are not considered material to our business are not discussed. This approach should enable stakeholders to accurately evaluate the BIHL Group's ability to create and sustain value over the short, medium and long term. Management is not aware of the unavailability of any reliable information or any legal prohibitions to disclosing any material information.

Refer to page 16 for more information on our material matters.

TM Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all of its rights are reserved.

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that, unless otherwise indicated, reflect the company's expectations as at

31 December 2022. Actual results may differ materially from these expectations if known and unknown risks or uncertainties affect its business, or if estimates or assumptions prove inaccurate. The company cannot guarantee that any forward-looking statement will materialise, and, accordingly, readers are cautioned not to place undue reliance on these forward-looking statements. The company disclaims any intention and assumes no obligation to update or revise any forward-looking statement even if new information becomes available as a result of future events or for any other reason, unless required to do so by legislation and regulation. The external auditor and assurance providers have not assured these statements.

ASSURANCE

BIHL has a combined assurance model, which is set out below.

Business process	Nature of assurance	Assurance provider
Annual fiinancial statements	External audit	Ernst & Young
Internal control processes	Internal audit services	Internal audit services with the assistance of Sanlam Internal Audit
BSE Listings Requirements	Compliance reviews	BSE and Ernst & Young
Insurance due diligence	Independent risk reviews	Ernst & Young, independent actuary and reinsurers

Per Botswana law and the BSE Listings Requirements, BIHL's annual financial statements were audited by our independent auditor, Ernst & Young.

Their unqualified independent auditor's report is set out on pages 112 to 116. The scope of their audit is limited to the information set out in the annual financial statements on pages 117 to 225.

APPROVAL

The audit and risk committee and the board acknowledge their responsibility to ensure the integrity of this report, which was reviewed by the audit and risk committee, the board, the Company Secretary and Statutory Actuary.

The board, after consultation with the audit and risk committee, concluded that this integrated annual report is presented materially in accordance with the Framework and approved it for publication on 6 May 2023.

Mahube Mpugwa	Catherine Lesetedi	Kudakwashe Mukushi
Acting Chairman	Group Chief Executive Offiicer (CEO)	Group Chief Financial Officer (CFO)
Andrew Cartwright	Chandrakant Chauhan	Robert Dommisse
John Hinchliffe	Lieutenant General Tebogo Masire	Nigel Suliaman
Kobus Vlok

Signatures were removed for security and privacy reasons.

CORPORATE INFORMATION

FEEDBACK

A hard copy of this integrated annual report is available on request as well as online at https://www.bihl.co.bw/investor-relations-pages

We are committed to improving this report each year and appreciate and encourage constructive feedback. Please forward comments to [e-mail]

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Contact details for BIHL are set out on the inside back cover.

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BIHL INTEGRATED ANNUAL REPORT 2022

BIHL INTEGRATED ANNUAL REPORT 2022

About BIHL

Focused	on our purpose
livelihoods
of improving

BIHL INTEGRATED

ABOUT BIHL

The BIHL Group is a leading BSE-listed financial services group with a proud record of achievements.

We are the holding company of two subsidiaries.

CORE VALUES

ABOUT BIHL

INVESTMENT CASE

Key player in the Botswana financial markets

Financial business with diverse revenue streams

Botswana Life Insurance Limited Botswana's leading life insurer with a market share estimated at over 71%. Botswana Life administers more than 300 000 policies and underwrites over P1,9 billion in recurring premium income.

Botswana Insurance Fund

Management Limited

A pioneer in asset management managing in excess of

P36 billion in assets across equity, fixed income, real estate, liquidity and alternative investments.

•	Collaboration
•	Corporate citizenship
•	High performance
•	Agility and innovation
•	Client-centricity

Strong group liquidity and balance sheet position

High-quality and competent management and staff

Technical institutional memory embedded in the leadership team

BIHL top shareholders

Sanlam	58,43%
Botswana Public Officers Pension Fund	14,72%
Motor Vehicle Accident Fund	4,04%
Other	22,81%

Associates

27,91%	50,00%
	*
37,62%	25,10%

33,00%

* Sold subsequent to year-end.

BIHL further holds a stake in five associate companies:

• Letshego Holdings Limited (Letshego or LHL)
• Botswana Insurance Company Limited (BIC)
• FSG
• Nico Holdings PLC
• Aflife Holdings Zambia.

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CORE BUSINESSES

• Life insurance
• Asset management
• Short-terminsurance
• Other services

Track record of compelling product offering across Botswana

Diverse and client-centric

Strong partnerships and networks across different industries

Responsible and efficient capital allocation

Strong and trusted brand identity

Satisfactory growth track record

Innovative product development team

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BIHL INTEGRATED ANNUAL REPORT 2022

BIHL INTEGRATED ANNUAL REPORT 2022