Chairman’s Statement
2023 has been a year of remarkable progress and resilience for Continental Re. Despite volatility on the African continent and the challenging global economic landscape, the company performance was encouraging, reflecting our unwavering commitment to our strategic goals, the strength of our business model, the dedication of our team, and the trust of our clients and partners.
Business and Operating Environment
Market Insights:
In 2023, the global reinsurance sector faced complex challenges and opportunities. Market conditions were shaped by increasing demand for reinsurance solutions, driven by heightened risk awareness and regulatory changes. According to the International Association of Insurance Supervisors (IAIS), global reinsurance premiums grew by 8% in 2023, reflecting a strong recovery from the previous year’s subdued growth due to the pandemic and economic uncertainties. This growth was primarily fueled by the rising need for natural catastrophe coverage and cyber risk insurance, particularly in emerging markets.
Macro-Economic Insights Shaping the Industry Landscape:
The macroeconomic environment in 2023 was characterized by moderate global economic recovery, with the International Monetary Fund (IMF) reporting a global GDP growth of 3.2%. Inflationary pressures remained elevated across many economies, influencing interest rates and investment returns. Despite these challenges, the reinsurance sector proved resilient, supported by robust capital positions, prudent underwriting, and effective risk management practices. The African region, in particular, showed significant growth potential with increased infrastructure investments and improved regulatory frameworks enhancing market stability.
Overview of Financial Performance for 2023
Gross Premium Income: We achieved a notable increase in reinsurance revenue, reaching NGN 112.46 billion, up 30% from the previous year. This growth underscores our success in attracting and retaining clients, reflecting their trust and confidence in our services.
Net Reinsurance Service Result: Our underwriting profit more than doubled, growing by 108% to NGN 9.14 billion. This strong performance is a result of our robust risk management practices and effective underwriting strategies.
Investment & Other Income: Our investment and other income experienced substantial growth, increasing by 440% to NGN 30.61 billion. This notable rise demonstrates the effectiveness of our investment strategies and our focus on diversifying income streams while maintaining high-quality assets.
Net Reinsurance Service Result
Our underwriting profit more than doubled, growing by 108% to NGN 9.14 billion. This strong performance is a result of our robust risk management practices and effective underwriting strategies.
Profit Before Tax: We recorded a significant increase in profit before tax, which rose by 228% to NGN 23.51 billion. This improvement reflects our operational efficiency and the success of our forex management strategies.
Loss Ratio: We made strides in enhancing our loss ratio, reducing it from 50% in 2022 to 41% in 2023. This reduction indicates our improved claims management and risk assessment capabilities.
Combined Ratio: Our combined ratio improved to 89% from 93%, demonstrating our commitment to operational efficiency and sustained profitability through effective expense management.
Return on Equity: We achieved a substantial increase in return on equity, which more than doubled to 25%, highlighting our strong financial performance and efficient capital utilization.
Claims Payment: We fulfilled our obligations to clients by paying out US$65.30 million in claims, up from US$42.31 million the previous year, further reinforcing our commitment to reliability and trustworthiness.
Regional Performance Highlights
Our regional offices have continued to play a pivotal role in our success. Each region—Lagos, Nairobi, Gaborone, Tunis, and CIMA—has contributed significantly to our group’s underwriting results and profitability, demonstrating resilience, operational efficiency and adherence to our risk management standards. Their strong performance reflects our strategic focus on regional diversity and the value of localized expertise in achieving our overarching business objectives.
Our focus on risk management and operational efficiency has yielded positive outcomes. The loss ratio moved only marginally from 52.8% in 2021 to 53.9% in 2022. Additionally, our combined ratio reduced slightly from 92% in 2021 to 91.7% in 2022, demonstrating our ability to manage expenses while ensuring the delivery of quality services to our clients.
Board Appreciation:
We would like to extend our gratitude to Mr. Folusho Laguda, Mr. Emmanuel Brule, and Mr. Quinten Matthew, who retired from the board this year, for their invaluable contributions and dedication to the company.
We warmly welcome Mrs. Ijeoma Taylaur and Mr. Chukwuemeka Akwiwu, whose appointments bring fresh perspectives and expertise to our board.
I also want to thank all our board members across the group for their steadfast commitment and strategic guidance, which have been instrumental in steering our company toward sustainable growth.
Conclusion:
We remain committed to driving sustainable growth and value for our shareholders, clients, and partners. As we build on the successes of 2023, we will continue to leverage our strengths, embrace innovation, and uphold the highest governance and risk management standards.
I extend my gratitude to our dedicated team, valued clients, and stakeholders for their unwavering support and trust in Continental Re.
Mr Paul Kokoricha
Chairman