Continental Re records N8.6bn premium in Q2

Pan-African reinsurer, Continental Reinsurance, said its gross premium income rose by 9 percent to N 8.6 billion in the second quarter of 2014 financial period, from N 7.9 billion in same period of 2013.

The firm noted that its growth continued to outpace the market, even in the face of growing competition and more scrupulous risk selection, due to the positive impact of its strengthening brand position in the market.

“We have had a successful half year in which we have seen volume growth from our regional offices contributing positively to the group’s market share across our chosen markets in line with our strategy,” said Femi Oyetunji, managing director, Continental Re. 

“Despite the relatively adverse claims experience impacting negatively on underwriting profit, we still see strong growth opportunities and are optimistic of an improvement in key indices by the end of the year,” he said.

Oyentunji stated that the company’s retrocession premium stood at N851.9 million and reflects a retrocession ratio of 10 percent, which is lower than that the previous period of 11 percent, an indication of better market conditions and improved management of programmes.

The firm’s underwriting profit reduced by 29 percent from N1.1 billion to N 786.8 million mainly due to worse claim, while investment income was lower by 4 percent from N513.3 million to N494.8 million due to the drop in yields across short-term interest rate instruments. 

The reinsurer’s profit before tax was lower by 18 percent from N1.4 billion to N1.1 billion in the period under review as a result of a reduced underwriting profit, while profit after tax was 17 percent lower from N1.1 billion to N907.5 million.

Its loss ratio increased to 50.2 percent from 44.5 percent mainly due to worse claim experience over the period, most notably for the oil and gas line of business.

The firm said its net management expenses was  N776.8 million, which was 11 percent higher than N702.2 million in 2013, while the management expense ratio to the net premium income remained the same at 10 percent.

 Continental Re’s combined ratio increased from 83 percent to 89 percent due to the increase in loss ratio.

Its total assets grew by 5 percent to N27.4 billion from N26.1 billion mainly due to increase in investment properties, while shareholders’ funds grew by 9 percent from N14.3 billion to N15.6 billion.

Continental Re is a private-sector reinsurer in Africa that provides non-life and life reinsurance services to African insurers. It is rated B+ (Good) by AM best for financial strength and credited for robust risk-adjusted capital.

“The company operates in more than 44 African countries and supports its pan-African footprint with regional offices in Douala – Cameroon, Abidjan – Cote d’Ivoire, Tunis -Tunisia, Gaborone – Botswana, and a fully licensed subsidiary, Continental Re Limited, in Nairobi, Kenya,” the company said in a statement.