Coronation Insurance in major rebound as PAT soars 461% in turbulent market
2019: PAT = N214m 2020: PAT = N1.2bn
CORONATION INSURANCE PLC waded through the insurance market turbulence of 2020 to grow profit after tax by over 460 percent to N1.2 billion from just N214 million in 2019, the company has disclosed in regulatory filings seen by Business A.M.
In a year marred by a coronavirus pandemic that shut global economies, including that of Nigeria, the performance is being hailed by analysts in ways that suggest the insurer is about to live up to analysts’ long standing expectation after its acquisition, and also following its recent change of name from Wapic Insurance to Coronation.
According to a financial report filed to the Nigerian Exchange, the gross premium written for the year under review stood at N16.2 billion against the previous year’s N15 billion, representing a 6 percent positive change. It is an indication that the business continued to experience gains resulting from the business model restructuring and transformation of the service channels embarked upon to reposition the group. The net profit income, however, moved inversely at N7.4 billion in 2020, as against the N7.8 billion in 2019, due to the transformation in the business model
The underwriting performance was impacted by the protests and attendant destruction due to the #EndSARS protest which led to a poor claims experience within the period. The group reported net insurance claims expenses of N3.2 billion in 2020, indicating an increase of N152 million over December 2019. The underwriting result at the end of the year amounted to an underwriting profit of N3.3 billion compared to an underwriting profit of N2.9 reported during the year ended 31 December 2019.
Investment and other income increased by 44 percent impacted by the inflow of funds from the rights issue and attendant investment in investment securities during the year. The increase from N1.4 billion in 2019 to N2 billion in 2020 was mainly as result of the additional investment from rights issue proceeds.
The group continued to put structures in place to ensure costs incurred are optimized and value created. Operating expense for the year totaled N5.43 billion against N5.34 billion in December 2019 and represents a 1.32 percent rise compared to the prior year expense.
Additionally, the group’s cash investment was in accordance with its investments policy, which is in tandem with regulatory requirements as the group‘s investment strategy was underpinned by a focus on highly liquid financial instruments, such as term deposit, equity and debt instruments, during the year. At the end of the fiscal year 2020, the group had seen approximately N13.5 billion invested in debt instruments, N706 million in equity instruments, as well as, N1.07 billion on money market placements as against N8.3 billion, N791 million and N512 million respectively for the comparative prior year period as of 31 December 2019.
Meanwhile, the year 2020 saw the insurer improve the number of shares held by shareholders by almost twice the amount recorded in 2019. Though the number of shareholders declined to reach 823,234 (from previous year’s 827.979), the total number of shares held hit N24 billion (from previous year’s N13 billion)
Lauding the performance of the insurance firm, despite the COVID-19 period, which hindered a lot of business activities, industry experts have said that improved performance would likely translate into a basis for better performance in subsequent years especially as the insurance firm recently partnered Access Bank in a bancassurance deal to enable it sell its policies through the bank’s branches.