Liberty Kenya Holdings posted a drop in net profit for the six months to June 2026, as lower investment income weighed on earnings despite an improvement in the insurance service result.

The insurer posted net earnings of Sh231 million from continuing operations, down 46 percent from Sh428 million in the corresponding period last year. After accounting for discontinued operations, total earnings stood at Sh231 million, compared with Sh260 million a year earlier.

The discontinued operations recorded no contribution to earnings in the review period, compared with a loss of Sh168 million in the first half of 2025. Discontinued operations involve sections of a company that are either sold or terminated and must be reported separately from ongoing activities.

The discontinued business relates to Heritage Insurance Company Tanzania Limited, which Liberty exited in April 2025 after more than 25 years as part of a strategy to refocus on Kenya.

Liberty said the decline in earnings was largely driven by weaker returns from its investment portfolio amid lower interest rates.

“Investments held are a significant contributor to group earnings and income unfortunately declined during the period mainly because of the lower interest rate environment that has manifested in reduced net yields,” the firm said in a commentary on the results.

Net investment income declined to Sh1.68 billion from Sh2.17 billion, a reduction of 22.7 percent. This offset gains in the insurance business, with the net insurance service result rising to Sh448 million from Sh225 million.

Liberty’s decline in investment income mirrors that of Sanlam Allianz Holdings Kenya, whose investment earnings fell 83.2 percent to Sh479.55 million from Sh2.86 billion, contributing to the insurer’s fall in profit from continuing operations.

The decline in profitability pushed Liberty’s basic and diluted earnings per share from continuing operations to 43 cents from 80 cents.

The group said its general insurance business continued to face elevated claims, while operating expenses increased due to investment in a systems migration project.

“The group delivered resilient operational performance during the first half of 2026, with a significant increase in the insurance service result compared to the corresponding period in 2025. However, the general insurance business continues to experience elevated claims experience,” the firm said.

Liberty said operating expenses were higher because of the systems migration, describing the spending as a one-off investment to provide them with the latest tools and technologies.

“As a result, operating expenses are higher than last year, reflecting this one-off investment,” said the firm.

The group did not recommend an interim dividend for the period.

→palushula@ke.nationmedia.com

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