Continental Reinsurance profit rises by 60%, gets N4.65 billion
Continental Reinsurance Plc, has recorded a profit before tax (PBT) of N4.65 billion in its 2016 operations, representing 60 per cent increase compared to N2.29 billion achieved in the previous year.
Also, the firm’s gross premium income rose to N22.41 billion, which represents 14 per cent increase over the N19.74 billion reported in 2015. In a challenging macro-economic and market environment across the continent, and adverse claims experience resulting from significant outlays on a couple of large property claims in Nigeria, underwriting performance was muted.
However, group net investment and other income improved substantially from N1.85 billion in 2015 to N4.87 billion in 2016, a 162 per cent increase, underpinned by a strong investment result bolstered by gains on hard currency assets. Underwriting profit for 2016 was N414 million down from N 2.05 billion in 2015.
The Group Managing Director/CEO, Dr. Femi Oyetunji, said: “Despite varied developments and widely contrasting fortunes in individual business lines in our underwriting portfolio, our geographic diversity and varied asset mix cushioned us. We continued to see sturdy growth and profitability in some regions and over all maintained strong group performance.”
According to him, the global commodity price meltdown and its impact on the hydrocarbon sector and the devaluation of the Nigerian Naira remained disconcerting factors for the business.
However, market analysts believe that current local intervention strategies and the upturn in the global economy justify general optimism regarding a sustained turnaround, recovery, and repositioning of the Nigerian economy for greater productivity and growth.
“It was the realisation of the likelihood of shocks in our principal market, and vulnerability to portfolio concentration that made us commit to diversification as a core element of our strategy.
“We continue to see stability and strong traction in specific locations across our network and our pan-African footprint allows us ample room to counterbalance local volatility and hedge downside risks in our investments portfolio,” he stated.
Oyetunji added, “Even as new risks emerge, we will persist in our efforts to grow our business by expanding our client base, building partnerships, and excelling in localised service delivery. We are also focused on improving the profitability of our business through better risk selection, more efficient distribution, process improvement, cost optimisation and judicious asset management. We look forward to continuing to report results that reflect the overall net positive impact of these actions in the years ahead.”
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