Chairman’s Statement

I am pleased to present the Chairman’s Report for 2022, highlighting our commitment to redefining excellence in our business. This year has yielded commendable results in the midst of a dynamic industry landscape. Our success is a result of our unwavering dedication to innovation, strategic partnerships, and sustainable growth. The theme of our report, “Redefining Excellence,” encapsulates our continuous pursuit of higher standards and committed efforts to deliver value to all stakeholders.

Business and Operating Environment

Market Insights:

Significant macroeconomic factors and trends shaped the African insurance industry of 2022. These elements have influenced the landscape, as analysis from reputable market players shows a notable shift toward digitalization, customer-centricity, and innovation.

Insurers across the continent are moving towards embracing technological advancements to enhance operational efficiency, boost customer engagement, and offer personalized solutions. The increasing global proliferation and adoption of data analytics, artificial intelligence, and blockchain technology will, hopefully, pave the way for more accurate risk assessment and streamlined processes on the African continent.

Macro-Economic Insights Shaping the Industry Landscape:

According to analysts, in the face of complex global and local challenges, African economies are navigating a demanding terrain. Persistent global and domestic pressures continue to hinder progress toward macroeconomic stability and societal well-being. Escalating living costs, driven by mounting inflation, are impeding sustained economic resurgence.

In 2022, Africa’s mean real Gross Domestic Product (GDP) growth decelerated to 3.8%, attributed to geopolitical tensions, climate change hazards, and the lasting impact of the COVID-19 pandemic. Tightened global financial circumstances have exacerbated these challenges, amplifying domestic debt obligations.

Despite these external challenges, Africa exhibited remarkable resilience in 2022, with all but one nation achieving positive growth. Prospects remain stable for 2023 and 2024, with projected GDP growth of around 4%, surpassing global averages. The top five African economies are expected to achieve growth exceeding 5.5%, potentially reclaiming their status as the world’s fastest-growing economies.

However, optimism must be balanced with the anticipation of ongoing global financial restrictions, market instability, and supply chain disruptions. These factors could strain exchange rates, heighten debt vulnerabilities, and sustain elevated domestic inflation, particularly impacting food and energy security.

Challenges are expected to ease, and inflation is forecast to ease from its 2022 peak, dropping to 8.8% by 2024. The continent’s mean current account deficit and fiscal deficit are also expected to stabilize.

Nonetheless, the path forward is fraught with obstacles. Ongoing global financial restrictions, disruptions in supply chains due to Russia’s actions in Ukraine, and potential policy reversals in election-bound countries contribute to the intricate African economic landscape.

Financial Performance: Steadfast on the Path to Success

Our 2022 financial performance demonstrates the resilience and adaptability of our operations in a rapidly changing environment. Despite economic fluctuations, we achieved commendable results across key metrics, reflecting our commitment to creating value for shareholders and clients.

We navigated the prevailing challenges stemming from the ongoing weakening of African currencies, a trend that impacted our financial landscape. In the face of the widespread currency fluctuations across the continent, we remained resolute in our commitment to fostering resilience. This commitment was manifest through our strategic allocation of resources and by dollarizing our assets, positioning us for sustainable growth.

During this period, our share capital underwent an adjustment, declining by 10.82% from its standing at USD 35,169 million in the previous year to USD 31,366 million.

Shareholders’ funds strengthened, growing 4.21% from USD 105,121 million in 2021 to USD 109,567 million in 2022. This upward trend reflects the business’s ability to sustain its solid financial foundation and value addition thereby enhancing shareholder confidence.

Driving Growth: Achievements in Gross Premium and Net Revenue

Our 2022 financial performance demonstrates the resilience and adaptability of our operations in a rapidly changing environment. Despite economic fluctuations, we achieved commendable results across key metrics, reflecting our commitment to creating value for shareholders and clients.
Mr Paul Kokoricha

Chairman

Our gross written premium grew by 47% from NGN 70.39 billion (USD 175,132 million) in 2021 to NGN103.21 billion (USD 242,589 million) in 2022. This growth underscores our ability to capture market opportunities and meet evolving client needs.

In the face of heightened market competition, our net premium revenue grew significantly, increasing by 29% from NGN49.76 billion (USD 123,821 million) in 2021 to NGN 63.94 billion (USD 150,293 million) in 2022. This achievement emphasizes our focus on sustainable profitable growth while delivering value-driven reinsurance solutions.

There was a notable increase of 31% in incurred claims which escalated from NGN 26.26 billion (USD 65,352 million) to NGN34.46 billion (USD 81,004 million).

Profitability and Sustainability: A Strong Foundation for Excellence

Our commitment to operational excellence led to commendable achievements in underwriting and investment activities. Underwriting profit increased by 32% from NGN 4billion (USD 9,954 million) in 2021 to NGN5.2 billion (USD 12,417 million) in 2022, exemplifying disciplined underwriting practices and effective risk management strategies contributing to improved overall profitability.

Investment income increased by 59% from NGN2.52 billion (USD 6.26 million) in 2021 to NGN 3.99 billion (USD 9.38 million) in 2022. This reflects our prudent investment approach and ability to capitalize on market opportunities, ensuring sustainable returns for stakeholders.

Profit before tax increased from NGN 6.66 billion (USD 16,588 million) in 2021 to NGN 8.44 billion (USD 19,829 million) in 2022, showcasing a 27% growth and reinforcing our commitment to delivering consistent and sustainable financial performance.

Risk Management and Efficiency:

Our focus on risk management and operational efficiency has yielded positive outcomes. The loss ratio moved only marginally from 52.8% in 2021 to 53.9% in 2022. Additionally, our combined ratio reduced slightly from 92% in 2021 to 91.7% in 2022, demonstrating our ability to manage expenses while ensuring the delivery of quality services to our clients.

Board Appreciation:

I extend my gratitude to all Board members across the Group for their contributions in 2022. Our diverse Boards, spanning nationalities and genders, maintain a strong team with varied professional backgrounds. Changes to the Board will continue to align with the long-term demands of the business as we anticipate its development in the coming years.

I welcome Mrs Christabel Onyejekwe, Mr Quinten Matthew, and Ms Oluwaseun Oni, who joined the Group Board in 2022 as Non-Executive Directors.

Conclusion:
2022 underscores our unwavering dedication to redefining excellence in our operations. To the credit of our employees and management team, the business continues to achieve remarkable growth across our financial metrics, showcasing operational prowess, and embracing transformative industry trends.

Despite challenges, our commitment to innovation, customer satisfaction, and sustainable profitability remains steadfast. We thank our shareholders, our employees, our clients and our partners for their unwavering support on this remarkable journey. Truly, these are unprecedented times, and we must adjust our sails in this new world order.

Thank you for your trust and confidence in Continental Re; we are poised to achieve new heights of excellence.

Mr Paul Kokoricha
Chairman

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