Sovereign Trust profit dips 82.66 percent on rising costs

Sovereign Trust Insurance Plc 2013 profit dipped by 82.66 percent culminating in lower return on share holders’ investment, analysis of the firm’s financial statement reveals.

For the year ended December 2013, the Nigeria insurer’s profit before tax fell to N274.85 million from N1.58 billion in the same period of the corresponding year (FY) 2012.

Similarly, profit after tax (PAT) shrank by 76.50 percent to N346.93 million in the period under review from N1.47 billion in the preceding year.

Sovereign Trust posted a gross premium written of N8.67 billion in FY13 this represents a 12.01 percent increase from N7.74 billion recorded in the same period of the prior year (FY) 2012.

The underwriting capacity was weak as net underwriting income reduced by 6.73 percent to N4.31 billion compared with N4.62 billion in the preceding year.

Earnings per share EPS reduced by 82.66 percent to 4k as against 23.07k as at FY12

Sovereign Trust Insurance Plc commenced business in January 1995 following the restructuring and recapitalization of the then Grand Union assurances Limited.

In order to reposition the insurance industry on a growth trajectory, National Insurance Commission the body that regulates insurance business in Nigeria introduced the ‘No Premium ‘No cover policy.

This is a section of the 2003 Insurance ACT that stipulates that Premiums must be paid for before an insurer can incept cover. This regulation was enforced by the regulator (NAICOM) with effect from January 1, 2013.

BALA AUGIE