Cornerstone Insurance PLC has paid N6.3 billion claims to its policyholders who suffered insured risks in its 2017 financial year. With the claims paid, the company has now repositioned its bereaved policyholders to the financial position they were before disaster struck.
Speaking at the 2017 annual general meeting (AGM) of the company in Lagos yesterday, its chairman, Mr. Segun Adebanji, said the claims paid was N2.9 billion higher than N3.4 billion claims paid in its 2016 financial year.
Claim recovery, according to him, was N1.4 billion as against N1.2 billion in 2016, noting that sharp increase in claim expenses led to underwriting loss of N2 billion compared to underwriting profit of N696 million of 2016. The net claims ratio for 2017, he stated, stood at 117 per cent as against 73 per cent for the previous year.
The largest contributors to the claims figure, he said, were the oil & gas and motor Insurance revenue accounts, which recorded net claims ratios of 536 per cent and 104 per cent respectively, mainly due to adverse development on certain claims and reserve strengthening in general.
As a result of management cost-cutting strategy, he said, operating expenses for the group remained flat at N3.5 billion. Stating that the company’s Gross Premium Written (GPW) for the year under review was N7.9 billion which was almost the same figure with the previous year, he stressed that the firm tightened its risk acceptance parameters as competitive pressures have driven premium rates to uneconomic levels, even as certain regulatory bottlenecks have hampered the implementation of the company’s expansion plans in the retail and mass market segments.
Promising that necessary actions have been taken to realign the company’s risk portfolio away from the unprofitable accounts that led to heavy losses, he added that: ‘Where repricing has not been possible, we exited or reduced our exposure significantly.’
Notwithstanding the significant regulatory bottlenecks, he disclosed that the insurer will continue to intensify its efforts to increase the proportion of its revenue sourced from retail segments which have traditionally been more profitable.
“The construction of our head office building is progressing satisfactorily and is due for completion before the end of 2018. While this has been a non-earning asset on our books for some time now, it is expected to start yielding income when the lettable spaces become available for rent upon completion,” he pointed out.
Speaking at the event, group managing director of the company, Mr. Ganiyu Musa, disclosed that the insurer, in line with the Tier-Based Minimum Solvency Capital (TBMSC), has communicated the National Insurance Commission (NAICOM) on the Tier the firm wishes to play in by the time the new recapitalisation model commences next month.
He informed the shareholders that the company will approach them later to raise more fund to augment its capital in a bid to play effectively in insurance market after the recapitalisation exercise, promising that Cornerstone Insurance will continue to do the needful to be an active player in insurance sector of the nation’s economy.