Continental Reinsurance Plc has announced its first quarter 2014 results. Commenting on the performance, Dr Femi Oyetunji, MD and CEO of Continental Reinsurance Plc said:
“I am confident of the continued growth of our business. Our recent expansion of the company’s footprint into Northern and Southern Africa as well as in new product lines will help us to drive growth and build shareholder value. We are optimistic that Africa’s economic fundamentals will continue to improve and Continental Re is well positioned to take advantage of the opportunities as they come.”
Statement of income
Gross Premium Income (GPI) at NGN 4,1 billion is higher than last years of NGN 3,3 billion by 25%. The significant increase in GPI, which is underpinned by strict adherence to prudent underwriting guidelines, is a result of the successful reinforcement of relationships with existing and new clients. The company keeps targeting the wide range of opportunities in Africa with new product offerings and is building on what has been its great strength – a trusted brand, responsive service to its clients and development of mutually beneficial partnerships.
Retrocession Premium at NGN 428,7 million reflects a retrocession ratio of 9,8%, which is marginally lower than that in the previous period of 10,3%.
Loss Ratio increased to 48% in 2014 (2013: 43%) mainly due to the settlement of a legacy claim emanating from Ghana that represented 14% of the total claims incurred losses amount.
Net Acquisition Cost Ratio for the first quarter 2014, shows a slight improvement down to 23% compared to 24% in 2013.
Net Management Expenses at NGN 330,2 million is higher than the 2013 comparative of NGN 221,5 million and consequently the 2014 management expenses ratio increased to 8%, marginally higher than the 7% in the comparative period of 2013.
Underwriting Profit increased marginally 3% from NGN 634,8 million in 2013 to NGN 651,2 million in 2014 with the excellent growth in top line being offset by the increase in combined costs. The underwriting profit ratio for 2014, denoting operating profit as a percentage of GPI, remain strong at 15% although it is slightly lower than that for 2013 ratio of 17%.
Investment Income at NGN 243,3 million is 2% higher than last years’ of NGN 239 million.
Profit before tax at NGN 764,3 million is 3% lower than last years’ of NGN 790,2 million.
Profit after tax at NGN 606,8million is 4% lower than last years’ of NGN 632,1 million.
Statement of financial position
Total Assets grew by 4% to NGN 27,2 billion from NGN 26,1 billion mainly due to increase in reinsurance receivables and investment properties.
Shareholders’ Funds grew by 3% from NGN 14,3 billion to NGN 14,7billion.
Return on Equity at 17% is the same as in 2013.