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Cornerstone Decries Uneconomic Premium Rates In Insurance Industry

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5 years ago

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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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