Yemisi Izuora
Continental Reinsurance Plc said the consolidated gross premium for the group rose by 32 per cent from N22.4billion in 2016 to N29.7billion in the 2017 financial year.
The firm said the increase was mainly driven by strong aggregated growth from its operations in Africa.
It said the underwriting profit, despite mixed performances at the regional level, rose by 213 per cent to N1.3billion from N414million in 2016, which was buoyed by the group’s increasing focus on underwriting discipline, and benign claims experience in the principal Nigerian market.
Throughout 2017, the firm said the African insurance market continued to experience the residual effects of prior years’ business turbulence, stemming from the sharp slowdown of key economies impacted by the widespread foreign exchange crunch arising from low commodity prices.
The Group Managing Director, Continental Re, Dr. Femi Oyetunji, explained that, “2017 represents yet another year characterised by headwinds emanating from the challenging economic environment. Localised volatility and periodic downturns are an inherent feature of doing business in Africa.
“Our performance reflects resilience deliberately imbued through a determined focus on portfolio diversification that broadens revenue base and ultimately smoothens performance cycles.
“This strategy continues to pay off, and despite the group’s underwriting result being moderated by considerable reserve strengthening for our Eastern operations, and unfavorable loss experience impacting our yet to mature Southern operations, performance fundamentals were maintained at good levels.”
Profit before tax remained positive at N3.6billionn though lower by 23 per cent than that for 2016, due to the non-recurrence of the substantial foreign currency revaluations that boosted the prior year result.
The group’s results were bolstered by a strong contribution of investment and other income, which at N6.6billion reflects a healthy 37 per cent increase over 2016.
Within the reporting period, A.M. Best affirmed the group’s rating of B+ (good), and highlights Continental Re’s very strong balance sheet strength, adequate operating performance and neutral business profile as positive factors.
It notes the company’s balance sheet strength recently augmented by a capital injection of $10million late in 2017, supports its strategic initiatives, as having strong risk-adjusted capitalisation, which is expected to remain at very strong levels over the medium term.
In 2016, the management introduced new and enhanced strategic proposals to chart the future course all through to 2020.
Oyetunji said: “Our bold transformation initiatives, building on the journey we began in 2011, are aimed at reinforcing the company’s growth and profitability objectives for years to come. We are well prepared to meet the inevitable challenges that are encountered due to the nature of reinsurance business.
We continue to pursue lofty growth and profitability ambitions and are structuring and reconfiguring ourselves to adapt our business and operating model to tide us over and ride any rough patches.”