Royal Exchange Plc, Nigeria’s premier insurance and financial services group, has announced its results for the 2016 financial year.
The company generated a Gross Written Premium of N12.5 billion from its business activities as at ended December 31, 2016, representing an increase of 16 percent over the figure of 2015, which stood at N10.8billion.
Making this announcement was the Group Managing Director, Royal Exchange Plc, Alhaji Auwalu Muktari, following the release of the financial results on the floor of the Nigerian Stock Exchange (NSE), recently.
Net Premium Income for the period amounted to N8.2Billion, with a minimal growth over that of Year 2015, which stood at N8.1Billion, while underwriting profit witnessed a 19 percent spike from N1.6billion in 2015 to N1.9billion in the financial year under review.
A further analysis of the operating results showed that the Total Assets of the group witnessed a growth of 20 percent, from N26.5 billion in 2015 to N31.7billion as at December 31, 2016.
Net claims paid for the period under review amounted to N3.6billion, an increase of 20 percent from 2015, which was N3.0billon. Net Income before management expenses grew by 13 percent to N2.7billion, up from N2.4billion in 2015
The Group Managing Director of the company, Alhaji Auwalu Muktari, stated that despite the very harsh operating environment in the year under review, the group was able to grow its top-line figures by participating in large-ticket financial transactions, as well as playing in the retail insurance market, which shall be a key growth driver in the years ahead.
According to Muktari, “Royal Exchange Plc envisions a situation where the retail insurance market should be able to contribute between 50-60 percent of our revenues in the future, as the retail market is the future of insurance in Nigeria, considering the population of the country.
Speaking further, he noted that “Royal Exchange Plc, will in the years to come, continue to be an aggressive player in the retail market in Nigeria and will be looking at different strategies to increase its product offering and visibility in the marketplace, while not losing track of the corporate market, where the returns and margins, are dwindling, yearly”.
The Group Managing Director noted that the bottom-line result of the group did not turn out as expected, due to increase in cost of doing business in the country, especially in the area of power generation in the over 33 locations where the group’s operations are located in Nigeria. He further noted that a major drawback in the profit of the company was an adverse result arising from the year’s mark-to-market valuations of the company’s insurance long-term contract liabilities and annuity funds done by our Consultant Actuary as required by both the IFRS and National Insurance Commission (NAICOM). HE stated that this exercise severely hampered the profitability of the company during the financial year ended December 31, 2015 and 2016 respectively. .
To stem this tide, Alhaji Muktari said that “the company has implemented various cost optimization strategies and business process re-engineering measures which shall guarantee profitability in both the current financial year and the years ahead.