Custodian and Allied Insurance Plc, one of the biggest life and non-life risks underwriting group said half year profit increased 14.97 percent, an impressive results due to the firms unrelenting customer focus.
The performance presents in concrete terms, the result of Custodian and Allied Plc unwavering customer focus, comprehensive systems, processes and operations integration; coupled with unrelenting commitment to its corporate ideal of exceeding customers and other stakeholders expectations at all times, according Wole Oshin Managing Director of the company in a statement on the its website.
“We will continue to ensure that our products and services are customer driven; even as we strive to position our subsidiaries to become Africa’s insurers of choice,” said Oshin.
This stellar performance will increase investors’ appetite for the company’s stocks given Nigeria insurance business that is in the embryonic stage.
For the first six months through June 2015, net income was N2.61 billion, compared with N2.27 billion the previous year.
Custodian and Allied underwriting capacity was efficient as gross revenue grew by 11.08 percent to N13.53 billion in 2015 from N12.18 billion last year.
Custodian and Allied will have to cut costs to further boost margins as cost to revenue ratio was as high as 73.90 percent in the review period.
It means out of every N1 generated in revenue by the company, it spent N0.736 on operating costs. Management expenses were up by 5.26 percent to N2.0 billion in 2015 as against N1.90 billion in 2014.
Operating expenses jumped by 7.09 percent to N8.0 billion in 2015 as against N7.47 billion.
Industry analysts see insurance penetration in Africa largest economy dampened as oil, which accounts for 90 percent of foreign exchange earnings and 70 percent of government revenue dropped 50 percent on heightened supply glut.
This culminated in delay of workers’ salaries and government cutting down on spending. Some states and companies have also retrenched staff to stay in business.
The aforementioned factors also resulted in weak consumer spending, rising inflation and the devaluation of the currency.
Custodian and Allied total assets increased by 12.48 percent to N54.10 billion in June 2015, from N48.86 billion in the same period of the corresponding year 2014.
Following the performance, the Board of Directors has recommended the payment of an interim dividend of 6 kobo on every 50 kobo ordinary share of the company to shareholders on record as at the close of business on 8th August, 2014
The company’s share price closed at N4.19 on the floor of the exchange while market capitalization was N23.76 billion.