Apart from a one-time N323 million profit in 2018, BusinessDay’s analysis of Royal Exchange‘s latest financial statements shows the company has had a loss making pattern since 2015.
The insurance company recorded a loss of N973.24 million in December 2021 compared to N77.12 million in December 2020.
Earned income dropped to N3.26 billion from N16.31 billion in the period under review.
Further analysis by BusinessDay showed profit before tax dipped to a loss of N737.3 billion in December 2021 compared to a gain of N130 million in the previous year.
Also, investment income which consists of dividends, realised gains and losses as well as unrealized gains and losses on financial instruments stood at N111.6 million, a 23.6 decrease from N146.2 million in the period under review.
Total assets dipped to N13.02 billion in 2021 from N32.37 billion in 2020.
Gross premium income dropped 82 percent to N2.66 billion from N15 billion in the comparable period.
Net premium income dipped to N2.14 billion in 2021 from N8.2 billion in 2020.
Net underwriting income dropped 75 percent to N2.22 billion compared to N8.85 billion in the period under review.
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Net interest income dropped to N100 million compared to N159.6 million in the comparable period.
According to Royal Exchange, interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets except for financial assets that are not originated credit-impaired but have subsequently become credit-impaired.
Royal exchange’s management expenses fell to N863.6 million compared to N2.27 billion in the period under review.
Net cash provided by operating activities recorded a loss of N7.36 billion in December 2021 from N1.07 billion in December 2020.
Net cash provided by investing activities recorded a year-on-year loss of N2.70 billion from N1.63 billion in the period under review.
Net use in financing activities recorded N169 million in December 2021 compared to the loss of N91.8 million in December 2020.
The company increased its loans and advances to customers to N1.12 billion in 2021 compared to N1.04 billion in 2020.
Amortised cost dropped to N106 million from N210.7 million in the comparable periods.
Property, plant & equipment dipped to N774 million in December 2021 compared to N3.08 billion in December 2020.
Royal exchange’s other receivables and prepayment dropped to N237 million from N471.5 million in the previous year.
Earning per share stood at N19 from N8 in the period under review.
Royal Exchange Assurance, London, was originally founded in 1720 and was one of the first two insurance companies in Britain to receive legal status via Royal Charter. Originally established for marine business, it expanded within a year to include fire and life insurance as well, thereby becoming Britain’s first composite insurer. The establishment of the branch in Nigeria was the result of an overseas expansion drive in the early 20th century.
