Company Secretary, Elizabeth Uba-Onubogu; Chairman, Segun Adebanji and Group Managing Director, Ganiyu Musa of of Cornerstone Insurance Plc at the company’s annual general meeting in Lagos.
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Chuks Udo Okonta
Cornerstone Insurance Plc paid N6.3 billion claims to policyholders who suffered insured risks in 2017 financial year, its Chairman, Segun Adebanji, has said.
He disclosed this today at the 2017 Annual General Meeting (AGM) of the company in Lagos, adding that the claims paid was N2.9 billion higher than N3.4 billion claims paid in its 2016 financial year.
Claim recovery, according to him, was N1.4 billion as against N1.2 billion in 2016, noting that sharp increase in Claim expenses led to Underwriting loss of N2 billion compared to underwriting profit of N696 million of 2016.
The net claims ratio for 2017, he stated, stood at 117 per cent as against 73 per cent for the previous year.
The largest contributors to the claims figure, he said, were the Oil & Gas and Motor Insurance revenue accounts, which recorded net claims ratios of 536 per cent and 104 lper cent respectively, mainly due to adverse development on certain claims and reserve strengthening in general.
As a result of Management cost-cutting strategy, he said, operating expenses for the group remained flat at N3.5 billion.
He posited that the company’s Gross Premium Written (GPW) for the year under review was N7.9 billion which was almost the same figure with the previous year, stressing that the firm tightened its risk acceptance parameters as competitive pressures have driven premium rates to uneconomic levels, even as certain regulatory bottlenecks have hampered the implementation of the company’s expansion plans in the retail and mass market segments.
Promising that necessary actions have been taken to realign the company’s risk portfolio away from the unprofitable accounts that led to heavy losses, he added that: ‘Where repricing has not been possible, we exited or reduced our exposure significantly.’
Notwithstanding the significant regulatory bottlenecks, he disclosed that the insurer will continue to intensify its efforts to increase the proportion of its revenue sourced from retail segments which have traditionally been more profitable.
“The construction of our Head Office building is progressing satisfactorily and is due for completion before the end of 2018. While this has been a non-earning asset on our books for some time now, it is expected to start yielding income when the lettable spaces become available for rent upon completion,” he said.
The Group Managing Director, Ganiyu Musa, at the event briefed shareholders on efforts made by the company to comply with the Tier-Based Minimum Solvency Capital (TBMSC) policy of the National Insurance Commission (NAICOM). He noted that the board had indicated the tier the company will operate in the TBMSC regime.
He told the shareholders that parts of the resolutions adopted by the board, is to approach them for fund to enable the firm meet the minimum solvency capital required for the tier adopted.
The former President of Noble Shareholders Association, Timothy Adesiyan, applauded the firm for sustaining a steady growth over the years and urged the firm to effectively manage claims burden arising from oil and gas business.
He also lauded NAICOM’s regulatory measures, especially the No Premium No Cover which had enhanced profitability of the sector.
The shareholders called on Nigerians to patronise insurance, stressing that insurance remains ones of the best tool to engender economic growth and development.