Yemisi Izuora
Royal Exchange Plc, has said that with the recent approval from the National Insurance Commission, NAICOM, to undertake agricultural insurance, the company has entered into strategic alliances with various stakeholders in the agricultural space to drive insurance with that sector of the economy and in the couple of months, revenues will start coming in from there.
The company will also in the years to come, continue to be an aggressive player in the retail market in Nigeria and will be looking at different strategies to increase its product offering and visibility in the marketplace, while not losing track of the corporate market, where the returns and margins, are getting thinner, yearly.
Theses projections are coming as the company said it generated a Gross Written Premium of N12.8billion from its business activities as at December 31, 2017, representing an increase in revenue when compared to the figure of 2016, which stood at N12.5billion.
Group Managing Director, Royal Exchange Plc, Alhaji Auwalu Muktari, disclosed the figures following the release of the company’s financial results on the floor of the Nigerian Stock Exchange (NSE), recently.
Net Premium Income for the period amounted to N7.1billion, while underwriting profit amounted to N7.6billion in the financial year under review.
A further analysis of the operating results showed that the Total Assets of the group witnessed a marginal growth of 5 percent, from N31.7billion in 2016 to N33.3billion as at December 31, 2017.
Net claims paid for the period under review amounted to N3.4billion, a reduction of 4 percent from 2016, which stood at N3.6billon. Net Income before management expenses totaled N2.4 billion, showing a slight dip from the N2.7 billion that was generated in 2016.
The Group Managing Director of the company, Alhaji Auwalu Muktari, stated that despite the very harsh operating environment, the group was able to grow its figures by participating in large-ticket financial transactions, as well as playing in the retail insurance market, which shall be a key growth driver in the years ahead.
According to Muktari, “Royal Exchange Plc envisions a situation where the retail insurance market should be able to contribute between 50-60 percent of our revenues in the future, as the retail market is the future of insurance in Nigeria, considering the population of the country.
The Group Managing Director noted that the bottom-line result of the group did not turn out as projected, due to increase in cost of doing business in the country, especially in the area of power generation and the general lull in the economic activities within the corporate markets. To stem this tide, Alhaji Muktari said that “the company has implemented various cost optimization strategies and business process re-engineering measures which shall guarantee profitability in both the current financial year and the years ahead. Our re-engineering process will center on three main pillars, namely Digital Transformation; Efficient Distribution Channels and Business Process Remodeling”.
He further said, “As a group holding company with five subsidiaries across the insurance and financial services landscape, it has become of vital importance that we seek to improve our efficiency across the group by leveraging on cost discipline, astute capital allocation and investments and deployment of operational know-how to make Royal Exchange Plc a leaner, faster, smarter and customer-centric organization”, He said also “that the company has repositioned itself to meet the ever-changing needs of the clients, wherever they are, offering them products and services they want, when they want it and how they want it.”
“For the future that we behold, our goal is to continuously redefine, reinvent and differentiate ourselves in the marketplace. The focus of the Board and Management of the Group is to achieve sustainable growth for the company through deepening our revenue base, improving service delivery and its support systems and at the same time, keeping costs in check,” he stated.