CONTINENTAL REINSURANCE PLC ANNOUNCES AN 83.61% INCREASE IN PROFIT
Lagos, 11th April 2016: Continental Reinsurance Plc has announced its 2015 audited year-end results which show an increase of 83.61% in profit before tax from N1.59billion in 2014 to N2.92billion. Gross premium income at N19.7billion is 22.19% higher than the N16.4billion reported in 2014 and the group turned in a year of a strong underwriting performance and overall profitability.
Dr Femi Oyetunji, Group Managing Director / CEO commented:- “In 2015 Continental Reinsurance showed resilience in an unfavorable environment leading to maintenance of our track record of profitability in both our underwriting and investment activities. We were able to attain our performance targets. Strategically, our pan-African geographic diversity helped us to absorb the shocks emanating from the array of challenges that confronted us from the external environment such as ‘tanking’ commodity prices, currency volatility and mounting competition.”
The company’s geographic expansion and broad product line mix gives it a diversified portfolio that has progressively positioned it to straddle local and regional market cycles and its consistent positive underwriting results reflect effective countering of concentration risk and short-term market uncertainties. The good underwriting performance in 2015 can also be attributed to a benign claims experience.
Summary of performance
- Gross premium income; N19.7billion, up from N16.4billion in 2014 giving a 22.19% year-on-year growth.
- Claims expenses; N9.0billion in 2015 compared to N7.37billion in 2014, an increase of 22.70%.
- Underwriting profit; N2.05billion in 2015, up from N1.37billion in 2014 (50.376% year-on-year increase).
- Investment and other income; N1.88billion in 2015, a 31.70% growth compared to N1.43billion in 2014.
- Profit before tax; N2.92billion in 2015, up from N1.59billion in 2014, an increase of 83.61%.
- Profit after tax; N2.14billion in 2015, up by 150% from N856million in 2014.
Statement of Financial Position:
- Total assets; N29.67billion in 2015, up from N28.21billion in 2014, a 5.18% year-on-year growth.
- Investment portfolio; grew by 7.54% to N17.54billion in 2015 from N16.31billion in 2014.
- Reinsurance reserves; N11.08billion in 2015, up by 2.76% from N10.78billion in 2014.
- Shareholders’ fund; N15.54billion in 2015, up by 5.15% from N14.78billion in 2014.
Continental Reinsurance currently operates from six strategic locations across the continent through a combination of regional and subsidiary offices. In 2015, the Lagos business constituted 54% of the total Non-Life business down from 60% in 2014 reflecting ongoing success in the strategy to de-risk the business by pursuing growth in new territories thereby reducing concentration in the Nigerian market. Performance of the other regional offices and subsidiaries is as follows:
- Tunis office operations recorded an increase of 72% in premiums with its contribution to group revenue increasing to 5% in 2015 (2014: 4%).
- Gaborone subsidiary revenue increased substantially year-on-year by 70% with its contribution to group revenue increasing to 9% in 2015 (2014: 6%).
- Nairobi subsidiary and Abidjan office both had a year-on-year revenue growth of 34% with contributions to group revenue of 16% and 8% in 2015 respectively. (2014: 14% and 7% respectively).
- Douala office year-on-year premium grew by 10% and its contribution to group revenue dropped marginally to 8% in 2015 (2014: 9%).
The company’s Life business picked up in 2015 recording a year-on-year increase of 38% compared to a decrease of 26% in 2014. The increase was mainly due to the consolidation of the company’s strong market share in Nigeria and gains in the largely untapped high growth potential across the African continent. Contributions from the regional offices and subsidiaries remained strong at 14%.
“Although the continent’s GDP growth is expected to be a modest 3.4% in 2016, insurance premium growth should continue to out-pace overall economic expansion. Our pan-African footprint, local market approach and multinational talent repository means that we are well positioned to ride this upside. This bolsters our confidence in our optimism that we will continue to deliver top line and bottom line growth on a sustained basis into the future for our shareholders and other stakeholders,” remarked Oyetunji.
About Continental Reinsurance:
Continental Reinsurance is a composite reinsurer, writing business in more than 50 countries across the African continent.
Established in 1985, and listed on the Nigerian Stock Exchange (NSE) in 2007, Continental Reinsurance provides support to over 200 insurance companies in Africa with its main offices in Nigeria, Cameroon, Kenya, Côte d'Ivoire, Tunisia and Botswana. It also has a specialist subsidiary – Continental Property and Engineering Risk Services (CPERS) – registered in South Africa.