Despite heightened political environment caused by uncertainties from pre and post elections era in our major markets, instability and decline in prices of major soft commodity prices, continued development of 2017 claims and pressure from global catastrophe losses in the second half of 2018, Continental Reinsurance PLC turned out another good operation and financial fundamentals in year 2018.
The composition and structure of earnings reflect the benefits of the Group’s geographically diversified operations that give it flexibility in generation of top-line, enabling it to offset the impact of localized adverse claims experience with better quality premiums from other regions, and broad asset mix and investment management prowess, that smoothens the volatility of underwriting earnings.
Market and business-cycle insights are key. It’s about deploying the right strategy and having the right operational balance. We have resources with deep local knowledge of the diverse environmental dynamics across Africa who marry their insights with strong technical capabilities to achieve sustainable positive outcomes in both our underwriting and asset management activities. I must say that our Group has once again shown resilience with our teams optimizing production and maximizing return on investments.
We are pleased to note that initiatives we took to reposition our Company since 2011 are bearing fruit. We strive to reflect our permanent commitment to Africa through continuous delivery of international best practice standards. The work of orchestrating the strengthening of our regional operations persists with a focus on continuous renewal of our talent base, our solutions offering, our operating model, our core processes and the technology we deploy, in order to embed the assimilation of our brand and our distinctive value proposition into the evolving, and increasingly sophisticated African market. Our goal to remain responsive to our stakeholders needs by putting in the culture and the systems to become more productive – not because we are working harder but because we are working smarter, and in alignment to our clients’ needs.
We successfully completed the incorporation and resourcing of the CIMA region subsidiary. This opens up an avenue of enormous growth; hence. with the assistance of our core shareholders, we will be giving more focus to this region. We similarly have areas of substantial growth potentials in the Eastern and Southern regions, that will make our growth aspirations achievable.
As evidenced by our financial and operations reports, we continue to show strong performance with strong fundamentals in underwriting and investment. With positive changes in key metrics and better motivation for our employees, we are very much on track to meeting our Alpha 2020 budget for both the top line and the bottom line.
Continental Reinsurance Plc’s performance for the year 2018 reflects the outcome of targeted underwriting actions and increased underwriting discipline. Gross Premium Income grew by 15%, from NGN29.67 billion in 2017 to NGN34.19 billion in 2018 and the underwriting profit declined by 9% from NGN1.30 billion in 2017 to NGN1.18 billion in 2018. The company’s Claims expense grew by 0.6%, from NGN10.65 billion in 2017 to NGN10.72 billion in 2018.
Despite the recorded reduction in underwriting performance compared to year 2017, profit before tax increased by 22% from NGN3.57 billion in 2017 to NGN4.36 billion in 2018 and an increase in profit after tax by 34% from NGN2.47 billion in 2017 to NGN3.32 billion in 2018. Investment and other income recorded a growth of 44% year-on-year from NGN3.71 billion in 2017 to NGN5.35 billion in 2018.
Total assets grew by 34%year-on-yearfromNGN43.13billionin2017to NGN57.64 billion in 2018 while Shareholders’ fund increased to NGN28.95 billion in 2018 from NGN20.78 billion in 2017, representing a 39% growth.
Investment portfolio grew by 23% to NGN29.81 billion in 2018 from NGN 24.31 billion in 2017 while Reinsurance reserves increased by 29% from NGN17.97 billion in 2017 to NGN23.26 billion in 2018.
Our coverage and well-balanced pan-African footprint has been sustaining our growth momentum. It strengthens our assurance in our ability to continue to record and achieve growth in market share of premium income and profitability.
The growth prospects of 3.4% in 2019 for sub Saharan Africa’s economy envisaged by the world bank presents another great opportunity for us as a company. Our positioning across the continent has given us the lead to take the advantage available in the market place. The projection will propel upward spending on major infrastructure investment projects and this will have positive impact on insurance activities where we are an active player.
One area of focus for us is the sustainability of good underwriting performance. We have seen a turnaround in our underwriting performance right across the group, and our emphasis on embedding and monitoring adherence to our underwriting guideline will continue. This, with advanced risk management techniques and critical skills development will ensure sustained growth and profitability in both short and long term.