Continental Re Records N16.15bn Earnings
Ebere Nwoji
Continental Reinsurance Plc said it increased its gross earnings by 7.4 per cent in 2014 financial period .
The company also said its gross premium during the period rose from N15.04billion in 2013 to N16.15bn in 2014.
Group Managing Director, Continental Re, Dr. Femi Oyetunji who disclosed this to THISDAY in Lagos said in 2014, the company made strong strides in the execution of its five-year strategic growth plan to be the premier pan-African reinsurer.
He said that Continental Re inaugurated its North African office in Tunisia and extended its footprint in Africa with the opening of a regional hub for Southern Africa in Gaborone, Botswana.
According to him,the company now operates from six locations across the continent namely Lagos, Douala, Nairobi, Abidjan, Tunis and Gaborone.
“Going forward, our focus will be to optimise returns from these capital investments, by consolidating our brand presence, enhancing our client services, securing strong growth in premiums, streamlining our underwriting practices, enhancing our operational efficiencies and strengthening our already formidable multi-national talent pool,” he said.
The firm’s underwriting profit fell by 18.5 per cent to N1.37bn in 2014 from N1.68bn in 2013, while its claims expenses rose by 15.5 per cent to N7.37bn from N6.38bn in the periods under review.
Continental Re’s investment and other income rose by 2.1 per cent to N1.43bn in 2014 from N1.40bn in 2013. It also recorded a foreign exchange loss of N391m in 2014 from a gain of N202m in 2013.
According to its financial result, the firm’s profit before tax reduced by 28.7 per cent to N1.59bn in 2014 from N2.23bn in 2013. Its profit after tax also reduced by 51.1 per cent to N856m in 2014, from N1.75bn in 2013 due to additional back duty taxes levied.
According to records, the company’s total assets rose by 8.0 per cent to N28.21bn in 2014 from N26.13bn in 2013, while its investment portfolio grew by 3.1 per cent to N15.64bn from N15.17bn in the periods under review.
Its reinsurance reserves rose by 9.2 per cent to N10.78bn in 2014, from N9.87bn in 2013, while its shareholders’ fund rose by 3.4 per cent to N14.78bn from N14.29bn in the periods under review.
Solvency margin improved to 106 per cent in 2014 from 105 per cent in 2013.
The company noted that during the year, attainment of growth targets and operational performance as initially envisioned were constrained by negative exchange rate movements of a number of African currencies against the naira and significant devaluation of the naira against the dollar late in the fourth quarter.
Concurrently, it noted that there was non-recurring weakening of certain key indices emanating from remediation of legacy business-process inefficiencies as part of alignment of these in line with overall objectives and the need to comply with industry standards particularly enforcement of the ‘no premium no cover’ standard in debtors’ management.
However, the firm said overall financial condition of the company was preserved as evidenced by the growth in assets and shareholders’ funds and the improvement in the solvency margin.
“We continue to monitor enterprise-wide underwriting, operational, regulatory and other risks to ensure adequate mitigation thereof by way of controls and measures that are geared to minimizing downside impact on long–term performance,” Oyetunji said.
He added that the increase in business volumes and escalation in the complexity of its transactions due to the geographical diversity of its operations had resulted in an enhanced focus on the areas of control, automation and compliance.