Page 29 - Continental Reinsurance 2022 Annual Report

2022 Investment Performance 27
Review and Report

To maintain a balance between earning competitive risk-adjusted returns on investment and ensuring that we match our assets
and obligations by currencies, we will seek to increase our USD assets. Future USD obligations that are eligible transactions for the
purchase of USD in the official market will be bought at the spot market when there is liquidity in the market.

The tables below show group assets by currencies and the composition of the currencies to the total portfolio:

Group's Assets by currency =N= USD KES CFA GBP BWP TND EUR GHS Total
N'Million N'Million N'Million N'Million N'Million N'Million N'Million N'Million N'Million N'Million
Currencies
Asset Class 2,157 6,600 998 1,182 0 216 1,592 169 56 12,969
Placement with banks 174 0 0 0 0 0 0 0 0 174
Quoted Equity 18 0 0 0 0 0 0 622
Unquoted Equity 280 324 0 0 0 0 0
FGN Bond 5,706 17,565 3,809 109 0 0 0 0 27,188
Corporate Bond 204 0 0 88 0 0 2,936
Treasury Bill 0 2,644 0 0 161 0 0 0 37 2,227
Mutual Fund 0 0 2,190 0 0 0 0 0 4,579
Statutory Deposit 3,273 0 0 0 0 0 1,000
Investment Property 1,000 1,146 0 0 161 0 0 5,104
Total 1,850 0 0 0 0.28% 1,592 169
% to total asset at 31 Dec 2022 11,109 0 3,254 0.39% 304 2.80% 0.30% 93 56,801
% to total asset at 31 Dec 2021 19.56% 8,080 7,059 0.53% 1.79% 0.00% 0.16% 100.00%
19.86% 28,235 14.22% 12.43% 2.52% 0.36% 100.00%
Table 15 49.71% 16.17% 14.51%
44.40%

USD-denominated assets have the highest portion at 49.71% of N28.24 billion (December 2021: 44.40% of N19.71b), i.e., an
additional N8.52b in USD holdings. NGN, KES, and CFA constitute 19.56%, 14.22% and 12.43% of the group portfolio
respectively.

Table 16 below shows company assets by currencies and the composition of the currencies to the total portfolio.

Company's Assets by currency

Currencies =N= USD KES CFA GBP BWP TND EUR GHS Total
Asset Class N'Million N'Million N'Million N'Million N'Million N'Million N'Million N'Million N'Million N'Million
Cash and cash equivalent
Quoted Equity 2,157 4,203 7 0 0 0 1,592 169 56 8,184
Unquoted Equity 174 0 0 0 0 0 174
FGN Bond 18 0 324 0 0 0 169 37 622
Corporate Bond 280 0 0 0 0 0.55%
Treasury Bill 5,706 11,000 0 0 0 0 0 0.00% 93 16,706
Mutual Fund 204 0 0 161 0 0 0.30% 1,939
Statutory Deposit 0 1,735 0 0 0 0 0 0.70% 37
Investment Property 0 0 0 0 0 0 0 243
Total 0 0 161 0 0 1,000
% to total asset (31 Dec 2022) 1,000 82 7 324 0.52% 0.00% 1,850
% to total asset (31 Dec 21) 1,850 0 0.02% 1.05% 0.77% 0.00% 1,592
11,109 0 0.03% 1.46% 5.18% 30,754
36.12% 3.51% 100%
38.92% 17,300 100%
56.25%
54.60%

Table 16

The highest portion is USD assets at 56.25% followed by Naira assets at 36.12%. Our largest premium income earner is in Naira
necessitating the need to keep building on USD to match our liabilities or at least buy USD forward to meet the retro obligations,
which is USD denominated. Kenya mainly earns income in USD, which is preserved.

7.0. 2023 Outlook and Investment Strategy
The world economy continues to suffer from multiple shocks stemming from the COVID-19 pandemic, Russia-Ukraine war, and
supply shocks, including disruptions to both global supply chains and the availability of key commodities resulting in high cost of
energy, heightened inflation, and large currency depreciations relative to the U.S. dollar.

Heightened inflation across the globe has triggered unexpectedly rapid and synchronous monetary policy tightening around the
world to contain it, including across major advanced economies. Although this tightening has been necessary for price stability, it
has contributed to a significant worsening of global financial conditions, which is exerting a substantial drag on activity, hence
global growth has slowed to the extent that the global economy is perilously close to falling into recession.

Global growth is expected to decelerate sharply to 1.7% in 2023 from the previous forecast of 3%, which is the third weakest
pace of growth in nearly three decades, overshadowed only by the global recessions caused by the pandemic and the global
financial crisis.