Despite the harsh operating environment, Cornerstone Insurance Plc has recorded a gross premium income of N7.33 billion for the 2015 financial year.
This represents 41 per cent increase when compared with N5.21 billion gross premium announced in the previous year.
The company said the growth was achieved on the back of improving relationships with key partners and increasing revenue from new channels.
Speaking at the 24th yearly general meeting, in Lagos, the Group Chairman of the company, Adedotun Sulaimon, noted that, concomitant with this growth has been a rise in the cost of claims and insurance benefits, which were exacerbated by the deterioration in macro-economic conditions as explained in the foregoing paragraphs.
“Consequently, cost of claims and insurance benefits increased from N1.7 billion in 2014 to N2.8 billion in 2015. Notwithstanding this deterioration in claims experience, the Company recorded a 10 per cent improvement in its underwriting result,” Sulaimon said.
According to him, our ability to grow the premium income and underwriting profit, in difficult circumstances, is a further testament to the long-term viability of our strategy and the progress we have made in the implementation of same.Sulaimon noted that, the recognition of fair value changes on investment in major assets carried at fair value through profit or loss in accordance with IAS 39 is primarily responsible for the N332 million loss before tax recorded for the year.
Speaking further, he added that the company’s retained loss for the year rose to N535 million because of the addition of the minimum tax charge of N203 million for the year.
There were also adverse changes in the fair value of available for sale securities (AFS) of about N257 million in other comprehensive income caused by the impact of the poor performance of the stock market on our listed securities portfolio as well as the headwinds from monetary policies which reduced yields on the fixed income securities portfolio.
However, the excess of the fair values of the net assets acquired over the total fair values of the consideration paid and other non-controlling interest amounting to N1.83 billion was recognized and recorded as gain on bargain purchase in the consolidated Statement of Profit or Loss for the year ended 31 December 2015. Accordingly, the group profit after tax amounted to N1.63 billion and shareholders’ funds increased to N12.07 billion from N7.76 billion in 2014.