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Cornerstone Decries Uneconomic Premium Rates In Insurance Industry

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The chairman of Cornerstone Insurance Plc, Segun Adebanjo, lamented that competitive pressures have driven premium rates to uneconomic levels in the Nigerian insurance industry. 

Adebanjo, who spoke during the 28th annual general meeting of the insurance company in Lagos, said this development made the organisation put in place stricter risk acceptance parameters, and that it’s net claims ratio has been relatively stable since then. The firm’s net claims ratio for the year 2019 stood at 47 per cent.

Its Gross Premium Written in 2019 was N13.05 billion, representing an increase of 13 per cent over the previous year.

He also informed that premiums from life insurance accounted for 32.5 per cent of the gross premium written, an increase of 25 per cent over the previous year.

 

Adebanjo explained that the largest contributors to general business gross premium written were bonds, engineering & accident N2.12 billion; oil & gas N2.04 billion and motor N1.36 billion.

He said the company’s continued growth in special risk lines especially in the power, aviation, and oil and gas sectors was a testament to the confidence its customers and partners have in the firm’s technical underwriting expertise which it continued to strengthen.

“Our investment portfolios yielded positive performance figures driven mainly by trading activities on the Nigerian Stock Exchange (NSE), fixed income securities and the profit from continuing operations of of a joint venture arising mainly from the gains on disposal of investment property, overall, investment activities contributed a total of N4.8 billion to the group performance,” he stated.

Consequently, our company ended the year with a profit before tax of N4.01 billion, an increase of 22 per cent over the previous year, he added.

“Worthy of note is the improvement of our marginal surplus from N102 million in 2018 to N4.9 billion in the year under review. This takes our solvency margin to 198 per cent, almost double the regulatory benchmark. Cash and cash equivalents balances also rose from N4.22 billion to N12.64 billion, thus greatly improving our liquidity,” he posited.

He maintained that the board of directors of the firm recommended the transfer of N1.72 billion from the company’s share premium account to the share capital account by issuing bonus shares in the proportion of seven new share of fifty kobo each for every 30 existing share of fifty kobo each, to achieve the company’s recapitalisation plan, a request which was granted by the shareholders.

The chairman posited that the pandemic has affected global businesses, stressing that the firm will persevere through the challenging times and will continue to support its customers and intermediaries in managing their risks, while sustaining it corporate social responsibility initiative in support of the state and federal government.

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Banks’ CEOs Hold Emergency Meeting Over BDCs’ Forex Ban 

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Bank Chief Executive Officers on Thursday, held an emergency meeting on how to ensure compliance with the new forex directive of the Central Bank of Nigeria.

After the meeting, they spoke during a webinar organised to give an update on the banks’ preparedness to be the main channel of forex distribution, following the recent discontinuity of forex supply to the BDC operators by the CBN.

The executives assured the public that banks would make forex available to customers in accordance with the CBN’s directives.

After the last Monetary Policy Committee meeting, the Central Bank Governor, Godwin Emefiele, had ordered all Deposit Money Banks to set up teller points at designated branches across the country to fulfil legitimate FX request for personal travel allowance, business travel allowance, tuition fees, medical payments and SMEs transactions, among others.

Speaking at the webinar, the Group Managing Director/Chief Executive Officer, Access Bank Plc, Herbert Wigwe, said, “The banking industry as a whole was willing and ready to carry out this function. The banks have very strict compliance measures, in terms of verification and making sure that people who do apply are eligible.

“All Nigerian banks will be able to meet these requirements. If you look at all the branches nationwide, you will know that the banks have more than enough capacity to do this.”

He said if the banks saw any compliance issues, or people attempting to do things cunning, they would be reported to the CBN because the banks would ensure full compliance with the order.

The Group Chief Executive Officer, Guaranty Trust Holding Company Plc, Mr Segun Agbaje, while speaking on the capacity of the banks to meet the customers demand, said, “It is not only the CBN that has the ability to fund the market; the banks also have the resources to meet the demand, and we have agreed collectively that it will start immediately.”

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NERC: Over 1m Electricity Consumers Have Received Prepaid Meters

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Labour Warns FG Against Electricity Tariff Hike 

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The Nigeria Labour Congress faulted plans to allegedly sell the Transmission Company of Nigeria, saying it will lead to an increase in electricity tariff.

The NLC President, Mr Ayuba Wabba, said this in a statement titled, “This Kite will not Fly’’ on Friday.

Wabba explained that instead of allegedly planning to sell the transmission company, FG should focus on improving the electricity supply.

He described the attempt to hand over the TCN to a few ‘privileged’ Nigerians as self-serving, obtuse, odious, morally reprehensible and criminal.

The NLC president said, “The TCN is a strategic economic asset of immense national security implications. This is because the TCN traverses all nooks and crannies of Nigeria.

“It will be wrong that our country will be deliberately exposed to an avoidable vulnerability and thus, provide an opportunity to others to restrain the Nigerian state.

“We apprehend that the planned sale of the TCN is only an attempt to further confound the people and concurrently raise electricity tariff. Unfortunately, this time around, Nigerians have had enough.

“The government cannot promise improved power supply to consumers by the planned sale of TCN. The under-the-table scheming as transparent privatisation cannot pass muster.

“It is an unsavoury narrative for our country, that even the privatised assets, which have survived the rapacity of the new owners, have been turned into unrealisable collaterals for unpayable loans.

“This constitutes a bone stuck in the throat of financial institutions and sundry creditors.”

Wabba explained that the plan would “fundamentally weaken the security of the nation and above all, deprive the people of their age-old investments in the commanding heights of the Nigerian economy”.

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