Lagos, 4 August 2014: Continental Reinsurance Plc has announced its second quarter 2014 results. Commenting on the results, Dr Femi Oyetunji, Group CEO of Continental Reinsurance Plc said: “We have had a successful half year in which we have seen volume growth from our regional offices contributing positively to the Group’s market share across our chosen markets in line with our strategy. Despite the relatively adverse claims experience impacting negatively on underwriting profit, we still see strong growth opportunities and are optimistic of an improvement in key indices by the end of the year.”
Statement of income
Gross Premium Income at NGN 8,6 billion is higher than last year’s NGN 7,9 billion by 9%. Growth continues to outpace the market, even in the face of growing competition and more scrupulous risk selection, due to the positive impact of our strengthening brand position in the market. The company is on course to achieve its annual budget.
Retrocession Premium at NGN 851,9 million reflects a retrocession ratio of 10%, which is marginally lower than that the previous period of 11% and is an indication of better market conditions and management of retrocession programmes.
Loss Ratio increased to 50,2% from 44,5% mainly due to worse claim experience over the period, most notably for the oil and gas line of business.
Net Acquisition Cost Ratio / NPI was marginally lower at 25% compared to the previous period of 26%.
Net Management Expenses at NGN 776,8 million is higher than the 2013 comparative of NGN 702,2 million by 11%. The management expense ratio to the net premium income remained the same at 10%.
Combined ratio increased from 83% to 89% due to the increase in loss ratio.
Underwriting Profit reduced by 29% from NGN 1,1 billion to NGN 786,8 million mainly due to worse claim experience as indicated above.
Investment Income at NGN 494,8 million is 4% lower than last year’s of NGN 513,3 million mainly due to the drop in yields across short-term interest rate instruments.
Profit before tax at NGN 1,1 billion is 18% lower than the previous period of 1,4 billion as a result of a reduced underwriting profit.
Profit after tax at NGN 907,5 million is 17% lower than last years’ of NGN 1,1 billion.
Statement of financial position
Total Assets grew by 5% to NGN 27,4 billion from NGN 26,1 billion mainly due to increase in investment properties.
Shareholders’ Funds grew by 9% from NGN 14.3 billion to NGN 15,6 billion.
Return on Equity at 12% is lower than previous period of 16%.