Global economy

The global economy recorded a 3.1 per cent growth in 2015 with pick up more gradual than prior years especially in emerging markets and developing economies. In advanced economies, modest and uneven recovery was expected to continue with a gradual further narrowing of output gaps. Growth in emerging markets and developing economies – while still accounting for over 70 per cent of global growth – declined for the fifth consecutive year. Three key transitions continue to influence the global outlook: (1) the gradual slowdown and rebalancing of economic activity in China away from investment and manufacturing towards consumption and services; (2) lower prices for energy and other commodities; (3) a gradual tightening in monetary policy in the United States in the context of a resilient U.S. recovery as several other major advanced economies central banks continue to ease monetary policy.

African economy

Africa is among the fastest growing regions, but it now faces significant headwinds as a result of global trends and region specific risks. Africa GDP growth has slowed, coming in at 3.4 per cent in 2015, down from 4.6 per cent in 2014, the weakest pace since 2009.

Per capita income growth is low, weighed down by population growth. There is variation across countries, particularly between resource and non-resource rich countries, but overall, the region’s growth trend remains below pre-financial crisis levels. Slower growth deepens the challenge of reducing poverty. The incidence of extreme poverty has fallen but remains high. Overall, growth is less poverty-reducing in Africa than elsewhere.

The global commodity super-cycle has come to an end, sharply lowering the price of oil, gas, metals and minerals. As a net commodities exporter, Africa is deeply affected by falling commodity prices, putting pressure on the current account and fiscal balances. IMF World Economic Outlook points to a situation of ‘Too slow for too long’ with projected recovery to continue to strengthen in near term and beyond, driven primarily by emerging market and developing economies, as conditions in stressed economies start gradually to normalise, uncertainty increased and risks of weaker growth scenarios are becoming more tangible. These fragilities increase the urgency of a broad based policy response to raise growth and manage vulnerabilities.

Global reinsurance

Despite the many competitive pressures buffeting the reinsurance industry, capital adequacy is a key strength of the sector in 2015, though global natural catastrophe losses totalled USD 31 billion in 2015, relatively flat from 2014. Alternative capital along with low catastrophe losses puts pressure on pricing, particularly in property catastrophe reinsurance. One of the main strength relates to exchange rate mechanisms, with reinsurers among the leading practitioners and the ongoing consolidation within the sector, mostly driven by the hunt for greater scale and diversification. As a result of these pricing pressures, the industry combined ratio will be between 95 and 100 per cent for 2016, which includes a 10 percentage point catastrophe load and a 6 per cent benefit from reserve releases.

African Reinsurance market performed amidst tough competition and oversupply of capital. The questions are whether this is sustainable. The increased focus is on regulation and local content requirements as well as the interest of international reinsurers in expanding to developing markets.

Nigerian insurance market

The Nigerian Insurance Market is tipped for strong growth, characterised by growing uptake, untapped potential, a seemingly open door for growth, however not without the prevailing navigating challenges.

With a growing population of 170 million and penetration still low, Nigeria’s insurance sector has considerable potential in demographic terms alone. At present, a large number of insurers compete for what business is available, creating a highly fragmented market. Acquisitions are an increasingly common mode of entry for foreign investors – a trend that is likely to continue. In the near term, attempts at better enforcement of laws and regulations are likely, as is the possible scaling-up of micro insurance.

Despite shortcomings in enforcement and financial reporting, the insurance sector continues to post double-digit growth, with a bright future ahead given demographic trends. Like other sectors in the Nigerian economy, the insurance industry has been hit by falling oil prices and a decline in national revenue. An increasing number of businesses and state agencies have not renewed policies from last year.

Financial result

The Group’s Gross Premium Income (GPI) grew by 22 per cent from NGN16.44 billion in 2014 to NGN19.74 billion in 2015. The Company contributed NGN15.37 billion of the Group’s premium representing 78 per cent, while the subsidiaries contributed NGN4.3 billion representing 22 per cent. The Company’s Gross Written Premium grew by 16.6 per cent, from NGN13.18 billion in 2014 to NGN15.37 billion in 2015.

GPI contributed by the subsidiaries grew by 33 per cent from NGN3.26 billion in 2014 to NGN4.37 billion in 2015. The Group generates business from the six regions of Africa. Fifty-eight per cent of the business came from Anglophone West Africa, 15 per cent from East Africa, 7 per cent from Southern Africa while the remaining 20 per cent is from other regions of Africa.

The breakdown of GPI shows that non-life grew by 17.6 per cent from NGN14.36 billion in 2014 to NGN16.89 billion in 2015; while life GPI grew by 37.6 per cent from NGN2.07 billion in 2014 to NGN2.85 billion in 2015.

Group underwriting profit grew by 50.4 per cent from NGN1.37 billion in 2014 to NGN2.06 billion in 2015 depicting a marginal improvement in combined ratio (life & non-life) of 1 per cent from 90 per cent in 2014 to 89 per cent in 2015. The huge growth in underwriting income is partly from write back in unexpired risk reserve.

Investment and other income jumped by 127 per cent from NGN1.03 billion in 2014 to NGN2.35 billion in 2015 partly due to impact of exchange gain. Foreign exchange gain/(loss) represents 20 per cent and -38 per cent of investment and other income in 2015 and 2014 respectively.

Profit Before Tax (PBT) grew by 84 per cent from NGN1.59 billion in 2014 to NGN2.91 billion in 2015; while Profit After Tax (PAT) grew by 150 per cent to NGN2.14 billion in 2015 from NGN0.86 billion in 2014. The sharp difference in the growth between PBT and PAT is the current income tax effect. The tax increased by 6 per cent in 2015 compared to total assets increase of 5 per cent from NGN28.21 billion in 2014 to NGN29.67 billion in 2015. Shareholders’ fund also grew by 5 per cent from NGN14.78 billion in 2014 to NGN15.54 billion in 2015.


In line with the Company’s dividend policy and subject to your approval at this meeting, the Board of Directors recommends cash dividend of 12 kobo per share for the financial year under review. This represents an increase of 9 per ent over the 11 kobo per share paid in 2014.

Board changes

Following the sale of C-Re Holding Ltd (C-Re Holding) by ECP African Fund II and its partners (the ECP Fund II Consortium) to Saham Finances (Saham) in September 2015, Mr. Hurley Doddy, Mr. Vincent Le Guennou, Ms. Nana Appiah-Korang, Mr. Bakary H. Kamara and Mr. Johnnie F. Wilcox, all representatives of C-Re Holding on the Board, resigned with effect from September 11, 2015. Mrs. Nadia A. Fettah, Mr. Raymond Farhat, Mrs. Ahlam Bennani, Mr. Merrick Oeschger, Mr. Joel A. Ackah and Mr. Raoul Diddier Moloko were appointed Directors representing C-Re Holding with effect from the same date.

However, after the year end, following the dilution by Saham of its investment in C-Re Holding, through transfer of 49 per cent to Capital Alliance Private Equity IV Limited, a private equity fund sponsored by African Capital Alliance, Mr. Joel A. Ackah and Mr. Raoul Diddier Moloko resigned from the Board with effect from March 1, 2015 and were replaced by Mr. Paul Ojei Kokoricha and Mr. Steve Olisa Iwenjora with effect from the same date. Also after the year end,
Mr. Ian Alvan Tofield was appointed Independent Non-Executive Director in compliance with NAICOM’s Code of Good Corporate Governance.


The Company believes that people are its most important asset in achieving its business objectives. The Company conforms with all regulatory requirements in the employment of staff, whilst also ensuring that only fit and proper persons are approved for appointment to Board or top Management positions. The Company provides policies and best practices that will make employees deliver the best results by giving priority to their professional fulfilment and ensuring that they acquire the right competencies. The Company treats all employees fairly and equally regardless of their gender, sexual orientation, family status, race, colour, nationality, ethnic or national origin, religious belief, age, physical or mental disability, or any such factor. Therefore, as an equal opportunity employer, the Company ensures diversity and inclusion in its people management activities.

Future outlook

Distinguished shareholders, we are very optimistic about the future prospects of our Company following the exit of ECP from C Re Holding, our core shareholder and the takeover by a consortium comprising Saham Finances and African Capital Alliance. While Saham Finances brings to us the benefits of their presence and experience across Africa, African Capital Alliance presents us with their deep understanding of the financial markets across the Continent and especially Nigeria, which remains our biggest market.

Their entry into our Company actually marks the opening of another phase in our growth history and should go a long way in realising our aspiration of becoming Africa’s premier reinsurance company.

We are committed to further embedding ourselves in the various markets we serve.


Fellow shareholders, the 2015 financial year marked another important milestone in the history of our Company, with the successful completion of the transition of majority shareholding and with our already strong positioning within the Continent. We are poised for continued growth and profitability.
I would like to use this opportunity to thank the Board of Directors, Management and Staff for their continued support for our vision of making our Company the Premier Pan-African reinsurer.

Thank you.

Mrs. Nadia A. Fettah