The year 2016 was another year of good operation and financial fundamentals for Continental Reinsurance despite the economic turmoil, political uncertainties and environmental challenges faced by the globe; dwindling commodity prices of major products in the world market that led to a drop in the reserves and devaluation of major African currencies; the world political uncertainties occasioned by many elections that changed the status quo in many countries and impact of global warming on the environment. We continue to press towards our goal of building a Company with very strong fundamentals by adapting to changes and embracing the range of opportunities offered by these challenges.
After the successful execution of our five-year strategic growth plan (2011 – 2015) focusing on geographical spread, brand strategy, extensive human capital development and continued process strengthening, we evaluated our performances to determine the success and the gaps. We combined our past experiences with present realities and future aspirations in line with the overall goals of the Company to roll out our next phase, Strategy Project Alpha 2020. The project is to consolidate our brand presence, enhance our client services to guarantee sustainable growth and strengthen our already formidable multi-national talent pool for the benefit of our continent at large.
Growth opportunities and challenges continue to vary widely across our markets, while short-term risks have introduced setbacks in certain countries – fundamentally altering the pace of growth.
Our continent is still vulnerable to external shocks. The slowdown of the global economy has dampened Africa’s growth prospects. However, notwithstanding these upsets, the Company is poised to continue along a positive growth trajectory. Underpinning the Company’s growth prospect is the diversification business model that offsets increased competition and the influx of international companies, particularly the big global players. We remain intensely focused on maintaining underwriting discipline and on profitability over growth to further strengthen the Company.
At Continental Re, we are passionately Pan-African. Our Pan-Africanism is not just about geographical location but more philosophical. We desire to see strong African institutions that will lead the world, Africa developed by Africans and, for our industry in particular, how we can keep African insurance premiums in Africa to develop our great continent.
Continental Reinsurance’s performance for the year 2016 affirms the resilience and consistency in achieving its strategic objectives and delivering financial returns to stakeholders. Profit before tax grew by 6%, from NGN2.92 billion in 2015 to NGN4.65 billion in 2016, and Profit after tax grew by 46%, from NGN2.14 billion in 2015 to NGN3.12 billion in 2016. Gross premium income at NGN22.4 billion is 14% higher than the NGN19.7 billion reported in 2015. Net investment and other income recorded a growth of 162%, from NGN1.86 billion in 2015 to NGN4.87 billion in 2016.
Total assets grew by 36% year-on-year, from NGN29.67 billion in 2015 to NGN40.25 billion in 2016 while Shareholders’ fund was NGN19.73 billion in 2016, up by 27% from NGN15.54 billion in 2015. The significant growth is partially attributed to other currency assets as a result of foreign exchange movement following a sharp devaluation of the naira.
Investment portfolio grew by 37% to NGN22.44 billion, from NGN16.38 billion in 2015 while Reinsurance reserves was up by 24%, from NGN11.08 billion in 2015 to NGN13.75 billion in 2016.
Out of the negative trend of year 2016, growth in Sub-Sahara Africa will accelerate gradually over the course of 2017. From a tepid 2.3% in 2016, a forecast of average regional real GDP growth of 4.1% is expected. This is majorly associated with gradual recovery in commodity prices that will lead to stronger business confidence, reduce imported price pressure and build stronger market dynamics. Rising commodity prices will increase spending to support major infrastructure investment projects which will ultimately have impact on insurance activities. We are already positioned to take advantage through our diversified presence across the continent and our already formidable multi-national talent pool.
Our pursuit shall continue to be excellent customer service. We will focus on strengthening our relationship management in a bid to surpass the expectations of our partners.