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Cornerstone records N7.33 billion premium

By Lucky Orioha
25 July 2016   |   1:44 am
Despite the harsh operating environment, Cornerstone Insurance Plc has recorded a gross written premium income of N7.33 billion for the 2015 financial year.This represents 41 per cent increase when compared with N5.21 billion gross premium...
 Company Secretary, Ifeoma Onubogu (left); Group Chairman, Cornerstone Insurance Plc, Adedotun Sulaiman; and Group Managing Director, Ganiyu Musa, during the 24th yearly general meeting of the company in Lagos.

Company Secretary, Ifeoma Onubogu (left); Group Chairman, Cornerstone Insurance Plc, Adedotun Sulaiman; and Group Managing Director, Ganiyu Musa, during the 24th yearly general meeting of the company in Lagos.

Despite the harsh operating environment, Cornerstone Insurance Plc has recorded a gross written premium income of N7.33 billion for the 2015 financial year.This represents 41 per cent increase when compared with N5.21 billion gross premium announced in the previous year.

The company said the growth was achieved on the back of improving relationships with key partners and increasing revenue from new channels.Speaking at the 24th yearly general meeting, in Lagos, the Group Chairman of the company, Adedotun Sulaimon, noted that, concomitant with this growth has been a rise in the cost of claims and insurance benefits, which were exacerbated by the deterioration in macro-economic conditions as explained in the foregoing paragraphs.

“Consequently, cost of claims and insurance benefits increased from N1.7 billion in 2014 to N2.8 billion in 2015. Notwithstanding this deterioration in claims experience, the Company recorded a 10 per cent improvement in its underwriting result,” Sulaimon said.

According to him, our ability to grow the premium income and underwriting profit, in difficult circumstances, is a further testament to the long-term viability of our strategy and the progress we have made in the implementation of same.Sulaimon noted that, the recognition of fair value changes on investment in major assets carried at fair value through profit or loss in accordance with IAS 39 is primarily responsible for the N332 million loss before tax recorded for the year.

Speaking further, he added that the company’s retained loss for the year rose to N535 million because of the addition of the minimum tax charge of N203 million for the year. There were also adverse changes in the fair value of available for sale securities (AFS) of about N257 million in other comprehensive income caused by the impact of the poor performance of the stock market on our listed securities portfolio as well as the headwinds from monetary policies which reduced yields on the fixed income securities portfolio.

However, the excess of the fair values of the net assets acquired over the total fair values of the consideration paid and other non-controlling interest amounting to N1.83 billion was recognized and recorded as gain on bargain purchase in the consolidated Statement of Profit or Loss for the year ended 31 December 2015. Accordingly, the group profit after tax amounted to N1.63 billion and shareholders’ funds increased to N12.07 billion from N7.76 billion in 2014.

“Our company will continued to focus on initiatives aimed at improving customers’ experience through the modernisation of our service delivery channels and deployment of innovative technology-enabled products. “We also intensified our efforts at giving back to the society through our social responsibility partnerships,” he said.

Apparently, our efforts in these areas did not go unnoticed by the community as our company received a number of recognitions and awards both within and outside the country.Commenting on the harsh operating environment, Sulaimon said, we expect the challenges of 2015 to carry over and endure for much of 2016.Notwithstanding, our company will continue to vigorously pursue the implementation of our strategic initiatives.

The focus of the Federal Government on the productive sectors of the economy and effective and successful implementation of the expansionary 2016 Federal Government budget should be favourable for insurance growth.

Also, with the position of the current government towards value for money, transparency and anti-corruption, the government should get a lot more value from its insurance spend. The ongoing review of the Insurance Bill, the engagement on the taxation of the insurance industry, the efforts of NAICOM at sanitising the market and those of the Nigerian Insurers Association at improving awareness and enforcement should help improve the lot of the industry. These developments will play to the strength of Cornerstone.

“Our company is gradually establishing a strong position in innovation and brand presence. In Cornerstone, we believe the market is changing and should be served differently. We would continue to innovate and improve on the quality of our service, leveraging technology to entrench differentiation.“We would remain focused on achieving our strategic objectives by investing in emerging growth opportunities in the retail and SME market segments while also growing our share of business in the corporate and commercial segment,” Sulaimon stated.

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