Royal Exchange Plc, Nigeria’s foremost financial services group, having maximized available growth opportunities, including investment and underwriting, recorded a double digit growth in earnings.
The Nigerian insurer’s efficient underwriting capacity, favorable working capital position, and robust capital base is a buffer against headwinds.
For the first nine months through September 2017, Royal Exchange Insurance’s net income increased by 23.48 percent to N240.36 million from N194.06 million the previous year.
The growth in profit was supported by a 286.40 percent surge in investment and other income to N1.14 billion in the period under review.
Royal Exchange diversified revenue base has paid off as gross premium written (GPW) was up 5.08 percent to N11.38 billion while gross premium income (GPI) increased by 10.35 percent to N10.36 billion as at September 2017.
The Nigerian insurer is efficient amid a tough and unpredictable macroeconomic environment as evidenced in a favorable combined ratio (CR).
CR in the period under review stood at 85.50 percent, though higher than the 73.65 percent recorded last year, is less than the 100 percent threshold.
The increase in CR is due to high claims and underwriting expenses as a percent of premium income as the Nigerian insurer continues to honor obligations to policy holders.
Total net claims increased to 48.28 percent in September 2017 from 40.97 percent the previous year; this means the company pays more claims to policy holders out of revenue it generate.
Total net claims incurred in the period under review stood at N2.74 billion, representing a 9 percent increase from the N2.52 billion incurred last year.
Underwriting expenses moved to 36.79 percent in the period under review as against 32.49 percent the previous year. Underwriting expenses increased by 4.50 percent to N2.09 billion.
Royal Exchange’s underwriting profit of N1.43 billion could increase as the company got National Insurance Commission (NAICOM)’s nod to underwrite Agricultural business.
Experts say the latest development will unlock new growth potentials that will increase consumer value and better returns on investment to the insurers teeming shareholders.
Royal Exchange Plc is engaged in providing life, healthcare and general insurance, financing, asset management, trusteeship and micro finance banking services. The company’s segments include non-life insurance, life insurance, financial services, healthcare and asset management.
In recognition of the efforts being undertaken to reposition the company, Royal Exchange Plc recently won two awards from BusinessToday Online as the 2016 Insurance Company of the Year while the Group Managing Director, Alhaji Auwalu Muktari was also adjudged the 2016 Insurance Man of the Year.
BALA AUGIE
