Page 24 - Continental Reinsurance 2022 Annual Report

22 2022 Investment Performance
Review and Report

Placement with banks: These are purely money market instruments in Term Deposits. The asset decreased by -3.06% year on
year from 13.38b as of 31st December 2021 to N12.97 billion as of 31st December 2022 and represents 22.83% of our portfolio;
during the year, we committed some of the cash to Federal Government Bonds. Relative to the budget, the asset class is lower than
the budget allocation by N3.56 billion due to lower collections. The cash allocation in the books of CRe Plc, Douala, Nairobi, and
Gaborone are %, 18%, 11% and 52.61% respectively. Overall, the allocation to total portfolio value was 22.83% as of 31st
December 2022 (Q32022: 19.17%Q22022: 19.74%; Q12022: 20.24%; Q42021: 30%).

The yield on the asset class was 4.27% (2021: 5%) and it represents the average of the rates on bank placements across the
various currencies compared with the budget yield of 5.05%. The return on cash and cash equivalent is partly driven by the
currency composition of the asset class and the total amount available for investment and impacted by the monetary policy stance
in various countries. We increased our USD term deposits. The government in various countries adopted tight monetary policy in
response to inflationary pressure and raised the Monetary Policy Rates. This resulted into increase in short term rates in some
economies, however, Nigeria short term rates remain subdued as at the end of Q42022.

The tables below show the currency distribution of cash components of our portfolio as of 31st December 2022:
Group – 31 December 2022

Currency =N= USD KES CFA GBP TND BWP EUR GHC Total
Amount (N'million) 2,157 6,600 998 1,182 0 1,592 216 169 56 12,969
% Weight 8% 9% 12% 2% 1% 0%
17% 51% 0% 100%

Group – 31 December 2021 Total
13,369
Currency =N= USD KES CFA GBP TND BWP EUR GHC
Amount (N'million) 1,395 7,711 152 2,155 0 796 1,101 0 59 100%
% Weight 1% 16% 6% 0%
10% 58% 0% 8% 0% Total
8,184
45% (Dec 2021: 51%) held in USD. Decline due to allocation to Bonds. 100%

Group – 31 December 2022 Total
7,442
Currency =N= USD KES CFA GBP TND BWP EUR GHC 100%
Amount (N'million) 0 1,592 169 56
% Weight 2,157 4,203 7 00 2% 1%
0% 19%
26% 51% 0% 0% 0%

Group – 31 December 2021

Currency =N= USD KES CFA GBP BWP TND EUR GHC
Amount (N'million) 0% 59
% Weight 1,395 5,185 7 0 796 1%

19% 70% 0% 0% 0% 0% 11%

51% (Dec 2021: 70%) held in USD. Decline due to allocation to Bonds.

Equity:
This class of assets is made up of 22:78 proportions of quoted and unquoted equities and represents 1.4% (2021: Q4 was:
1.66%) of the group portfolio. The return on equity comprises dividend income and capital gain on equity trading. On a total
return basis, the quoted equity portfolio return is N9.34 million (N11.246 million realized and unrealized gain of -N1.904 million)
on an average portfolio of N174.56 million as of 31st December 2022; Nigeria Stock Exchange return as measured by All Share
Index was 19.98% (Q42021: 6.07%).

The equity market has remained very volatile and our quoted equity exposure to total funds is 0.56% (2021: 0.64%).

The following charts show the distribution of the equity between quoted and unquoted:

Equity portfolio (N’million) N13, 2% N5, 1% Unquoted equity (N’million)

N63, 10%

N174, 22% Quoted equity N324, 52% Aveni-Re
N622, 78% Unquoted equity Uganda Re
N217, 35% Africa Re
Gthomes
Food Concept

Figure 3 Figure 4