Despite the unfavourable global economic and political environment, Continental Reinsurance showed resilience leading to maintenance of our track record of profitability in both our underwriting and investment activities. We were able to attain our performance targets. Strategically, our pan-African geographic diversity and broad product line mix that gives a diversified portfolio helped us to absorb the shocks emanating from the array of challenges that confronted us from the external environment such as ‘tanking’ commodity prices, currency volatility and mounting competition.
One noteworthy event that happened in 2015 was the successful acquisition of 57 per cent of Continental Reinsurance shares by two notable investors of high repute in the Continent; Capital Alliance Private Equity IV Limited, (a private equity fund sponsored by African Capital Alliance) and Saham Finances SA (the insurance arm of Saham Group).
This is an extremely positive move for our company and we are very pleased to have shareholders who share our vision for Africa. It will position Continental Reinsurance favourably to bolster our strategic objectives and strengthen what we have achieved over the past few years in terms of our pan-African foothold, expansionary plans and market positioning.
Continental Reinsurance’s performance for the period ended December 31, 2015 further confirms its consistency in delivering superior financial returns to stakeholders. There is an increase of 83.61 per cent in profit before tax from NGN1.59 billion in 2014 to NGN2.92 billion in 2015 and Profit after tax grew by 150 per cent from NGN856 million in 2014 to NGN2.14 billion in 2015. Gross premium income at NGN19.7 billion is 22.19 per cent higher than the NGN16.4 billion reported in 2014 and the group turned in a year of strong underwriting performance of 50.38 per cent with an increase in underwriting profit of NGN2.05 billion compared with NGN1.37 billion in 2014. Investment and other income recorded an impressive increase of 31.70 per cent, from NGN1.43 billion in 2014 to NGN1.88 billion in 2015.
Total assets grew by 5.18 per cent year-on-year, from NGN28.21 billion in 2014 to NGN29.67 billion in 2015 while Shareholders’ fund was NGN15.54 billion in 2015, up by 5.15 per cent from NGN14.78 billion in 2014.
Investment portfolio grew by 7.54 per cent to NGN17.54 billion in 2015 from NGN16.31 billion in 2014 while Reinsurance reserves were up by 2.76 per cent from NGN10.78 billion in 2014 to NGN11.08 billion in 2015.
Despite the difficulties economies on our continent are facing, the business spotlight has remained on our emerging market. The impact of insurance on the growing African economy is significant as it plays an important economic and social role.
As we all know, the African insurance sector is still at a relatively early stage of development; this is observed in the low penetration rates in comparison to the rest of the world and a continued lack of trust in indigenous African insurance providers. We are, however, making progress and remain optimistic about the future.
The continent’s GDP growth is expected to be a modest 3.4 per cent in 2016 and insurance premium growth should continue to out- pace overall economic expansion. Our pan-African footprint, local market approach, strong financial position and multinational talent repository means that we are well positioned to ride this upside. We maintain our firm commitment to grow our Company sustainably through volume growth, improved operational efficiencies, and development of critical skills. This bolsters our confidence in our optimism that we will continue to deliver top line and bottom line growth on a sustained basis into the future for our shareholders and other stakeholders.