Royal Exchange posts N12.5 billion gross premium
The Nigeria’s premier insurance and financial services group, Royal Exchange Plc, has said it generated a Gross Written Premium (GWP) of N12.5 billion in 2016, representing an increase of 16 per cent over the figure of 2015, which stood at N10.8 billion.
The Group Managing Director the underwriting firm, Auwalu Muktari, disclosed this following the release of the company’s financial results on the floor of the Nigerian Stock Exchange (NSE).
According to him, Net Premium Income (NPI) for the period amounted to N8.2 billion, with a minimal growth over that of 2015, which stood at N8.1 billion, while underwriting profit witnessed a 19 per cent spike from N1.6 billion a year ago to N1.9 billion in the financial year under review.
A further analysis of the operating results showed that the Total Assets of the group witnessed a growth of 20 per cent, from N26.5 billion in 2015 to N31.7billion as at December 31, 2016.
Net claims paid for the period under review amounted to N3.6billion, an increase of 20 per cent from 2015, which was N3.0billon. Net Income before management expenses grew by 13 percent to N2.7billion, up from N2.4billion in 2015
Muktari said despite the very harsh operating environment in 2016, the group was able to grow its top-line figures by participating in large-ticket financial transactions, as well as playing in the retail insurance market, which shall be a key growth driver in the years ahead.
According to Muktari, “Royal Exchange envisions a situation where the retail insurance market should be able to contribute between 50-60 per cent of our revenues in the future, as the retail market is the future of insurance in Nigeria, considering the population of the country.
“Royal Exchange will in the years to come, continue to be an aggressive player in the retail market in Nigeria and will be looking at different strategies to increase its product offering and visibility in the marketplace, while not losing track of the corporate market, where the returns and margins, are dwindling, yearly.”
He noted that the bottom-line result of the group did not turn out as expected, due to increase in cost of doing business in Nigeria, especially in the area of power generation in the over 33 locations where the group’s operations are sited.
He noted that a major drawback in the profit of the company was an adverse result arising from the year’s mark-to-market valuations its insurance long-term contract liabilities, and annuity funds done by our consultant actuary as required by both the IFRS, and National Insurance Commission (NAICOM).
HE admitted that the exercise severely hampered the profitability of the company during the financial year ended December 31, 2015 and 2016 respectively.To stem this tide, Muktari said: “the company has implemented various cost optimisation strategies and business process re-engineering measures, which shall guarantee profitability in both the current financial year and the years ahead.”