CONTINENTAL REINSURANCE PLC ANNOUNCES ITS Q3 2016 RESULTS
Lagos, 2nd November 2016: Continental Reinsurance Plc has announced its 2016 third quarter results. Gross premium income at the end of the quarter was N17.5billion, up from N15.1billion in 2015 representing a 16% growth.
“Growth opportunities and challenges continue to vary widely across our markets, while short-term risks have introduced setbacks in certain countries – fundamentally altering the pace of growth. In line with the Company’s strategy, progress continues to be spurred by our diversified presence across the continent,” said the Group Managing Director/CEO, Dr. Femi Oyetunji.
The Company recorded an underwriting profit of N746 million in 2016, a decrease of 42% from N1.28billion in third quarter 2015. This modest outcome was primarily caused by the impact of a few large claims that compromised profit expectations.
Investment and other income stood at N5.1 billion, a 212% growth year-on-year. The significant growth was partially attributed to unrealized gains on hard currency assets as a result of foreign exchange movements following the sharp devaluation of the Naira. Profit before tax was N5.03billion, (2015: N2.07billion), an increase of 143%.
“Our continent is still vulnerable to external shocks. The slowdown of the global economy has dampened Africa’s growth prospects. However, notwithstanding upsets in some of our markets, the Company is poised to continue along a positive growth trajectory,” said Dr Oyetunji. “Underpinning the Company’s growth prospects is the diversification business model that offsets increased competition and the influx of international companies, particularly from developed countries.” Dr Oyetunji added, “We remain intensely focused on maintaining underwriting discipline and our focus on profitability over growth to further strengthen the Company.”
In the month of October 2016, A.M. Best affirmed the Company’s financial strength rating of B+ (Good) and the long-term issuer credit rating of “bbb-“. The outlook of these credit ratings is stable.
Summary of Q3 performance
Income Statement:
- Gross premium income; N17.5billion, up from N15.1billion in Q3 2015, a 16% growth.
- Claims expenses; N8.3billion in 2016 compared to 6.3billion in 2015, an increase of 32%.
- Underwriting profit; N746 million in 2016, down from N1.28billion in 2015, 42% decrease.
- Investment and other income; N5.1billion, a 212% growth compared to N1.6billion same period in 2015 partially representing unrealized gains.
- Profit before tax; N5.03billion compared to N2.07billion in Q3 2015, an increase of 143%.
- Profit after tax; N3.75billion, up by 144% from N1.54 billion in Q3 2015.
Statement of Financial Position:
- Total assets; N39.4billion, up from N29.7billion in 2015, a 33% growth.
- Investment portfolio; grew by 30% to N21.32billion from N16.38billion in Q3 2015.
- Reinsurance reserves; N10.54billion, up by 18% from N8.89billion in Q3 2015.
- Shareholders’ fund; N18.7billion, up by 20% from N15.54billion in Q3 2015.