By Nse Anthony-Uko
(Sundiata Finance) – Cornerstone Insurance PLC said it paid gross claims of N4.5 billion to claimants in its 2016 financial year, representing an increase of 61 per cent from the N2.8 billion posted the previous year.
This, it said, was driven largely by death claims from the group life, credit life and third party motor classes of insurance, even as high claims inflation and the security challenges in the North East and South- South zones of the country led to a significant deterioration in its claims.
Speaking at the 25th Annual General Meeting(AGM) of the company in Lagos at the weekend, the group Chairman, Cornerstone Insurance Plc, Mr. Segun Adebanji, noted that company also sustained its growth trajectory by growing its Gross Premium Written(GPW) by 25 per cent to N9.1 billion from N7.3 billion in 2015.
Claim recovery, he said, was N1.1 billion as against N648 million in 2015, noting that
the sharp increase in Claim expenses led to underwriting result of N696 million compared to N1.6 billion in 2015.
Sales to retail customers, he said, accounted for 25 per cent of premiums while Special Risks products to the Oil & Gas and Engineering sectors contributed the second highest proportion at 23 per cent. The increased financial strength from the conclusion of the acquisition of Fin Insurance and their growing reputation as a credible partner, according to him, is now opening the opportunity for leadership position on major transactions as well as provide support for retail expansion.
The company, he said, has since carried out a comprehensive portfolio review and corrective actions have been taken to improve terms and conditions, reduce participation or exit the business as appropriate.
Net investment income increased by 98 per cent from N740 million to N1.47 billion, mainly due to the consolidation of the investment income of the subsidiary, he said.
He stressed that the unlisted equities portfolio suffered significant impairment while the financial commitment on the firm’s new head office building constrained the liquidity that would have benefited from attractive yields on short term instruments. Similarly, he said, the rising cost of goods and services, coupled with the first-time consolidation of the operations of the subsidiary led to a 45 per cent increase in management expenses.
Significant investments, he noted, are being made in improving the technology and distribution infrastructure to support the company’s retail strategy, adding that the agency network almost doubled from 832 to 1,600 agents while a robust platform has been built for the rollout of the bancassurance channel.
Cornerstone Insurance Pays N4.5bn Claims
By Nse Anthony-Uko