Continental Reinsurance Plc has said that the consolidated gross premium for the group rose by 32 per cent from N22.4bn in 2016 to N29.7bn in the 2017 financial period.
A statement obtained from the company on Monday said the increase was mainly driven by strong aggregated growth from its operations in Africa.
It noted that the underwriting profit, despite mixed performances at the regional level, rose by 213 per cent to N1.3bn from N414m in 2016, buoyed by the group’s increasing focus on underwriting discipline and benign claims experience in the principal Nigerian market.
Throughout 2017, the statement said, the African insurance market continued to experience the residual effects of prior years’ business turbulence, stemming from the sharp slowdown of key economies impacted by the widespread foreign exchange crunch arising from low commodity prices.
The Group Managing Director, Continental Re, Dr. Femi Oyetunji, was quoted as saying, “The 2017 financial year represents yet another year characterized by headwinds emanating from the challenging economic environment. Localised volatility and periodic downturns are an inherent feature of doing business in Africa.
“Our performance reflects resilience deliberately imbued through a determined focus on portfolio diversification that broadens our revenue base and ultimately smoothens performance cycles.”
He added, “This strategy continues to pay off, and despite the group’s underwriting result being moderated by considerable reserve strengthening for our Eastern operations and unfavourable loss experience impacting our yet to mature Southern operations, performance fundamentals were maintained at good levels.”
According to the group, profit before tax remained positive at N3.6bn though lower by 23 per cent than that of 2016 due to the non-recurrence of the substantial foreign currency revaluations that boosted the prior-year result.
The group’s results were bolstered by a strong contribution of investment and other income, which at N6.6bn reflected a healthy 37 per cent increase over 2016.
Within the reporting period, A.M. Best affirmed the group’s rating of B+ (good).
According to the statement, the rating report highlights Continental Re’s very strong balance sheet strength, adequate operating performance and neutral business profile as positive factors.
It noted the company’s balance sheet strength, recently augmented by a capital injection of $10m late in 2017 to support the company’s strategic initiatives, as having strong risk-adjusted capitalisation, which is expected to remain at very strong levels over the medium term.
In 2016, the management introduced new and enhanced strategic proposals meant to chart the future course of the company through to 2020.