Almost nine months after the end of the year on December 31, 2017, directors Standard Alliance Insurance Plc presented its financials, indicating that despite a drag in gross premium written, there was a return to profit, although marginal.
This was even as the external auditors BDO Professional Services drew attention to the shortfall of N1.477bn in assets cover, which board explaned, resulted from the company’s exposure “to a range of financial risks through its financial assets, financial liabilities, reinsurance assets and insurance liabilities.”
The financial risk, the directors continued, “is that in the long term, its (Standard Alliance Insurance) investment proceeds will not be sufficient to fund the obligations arising from its insurance contracts…”
This, the auditors in their report to the shareholders, indicate “that the company was not able to generate adequate liquid assets to cover the policy holders’ funds.”
For example, while asset/liability ratio in the non-life business for the period is a deficit of N609.776m; life yielded a deficit of N619.085m; while annuity closed at N35.295m surplus.
Gross premium written for the period stood at N4.844bn, up from N4.378bn in 2016, but remained below the three-year best of N5.235bn reported in 2015. Gross premium income climbed to N4.997bn, compared with the N4.34bn recorded in the preceding full-year; just as reinsurance expenses increased to N715.489m, up from N793.015m. This left net premium income at N4.282bn from N3.648bn.
Commission income rose marginally to N139.654m from N118.816m; leaving net underwriting income of N4.421bn from N3.767bn.
Net claims expenses of N1.489bn; a slight drop from N1.828bn; added to the total underwriting expense of N1.548bn, which fell from N1.666bn in 2016; brought total underwriting expenses to N3.037bn, down from N3.495bn. This lifted underwriting profit to N1.384bn; as against the previous N271.846m.
Investment income for the period grew to N165.585m, up from N139.255m; just as other income rose from N149.22m to N197.595m; even as loss on investment contract liabilities declined by about a fifth from N158.374m to N38.23m.
Management expenses for the period was flat at N1.45bn, compared to the N1.515bn reported in 2016; finance charges fell from N189.904m to N80.533m; just like foreign exchange loss from N385.289m to N52.617m.
These left profit before tax at N65.559m; as against the N1.214bn loss in prior year; while profit fore the year stood at N58.553m from the previous N1.341bn loss. Earnings Per Share for the period came to 0.45 kobo; from a loss of 11 kobo.