Continental Re profit rises by 46 per cent on FX gains

15 Mar 2017
Financial Nigeria


The company's total insurance premiums revenue rose by 22 per cent to N25.31 billion.

Femi Oyetunji, Group Managing Director/CEO, Continental Reinsurance

Continental Reinsurance, a Pan-African reinsurance company, has reported that its 2016 after-tax profit rose by 46 per cent owing to foreign exchange gains on investment assets and reinsurance receivables/payables.

The company said on Tuesday that after-tax profit rose to N3.12 billion compared to N2.14 billion reported in the previous year. The rise in profit was driven mainly by a stratospheric increase in FX gains to N4.07 billion in 2016 from N467.98 million posted a year earlier.

“Despite varied developments and widely contrasting fortunes in individual business lines in our underwriting portfolio, our geographic diversity and varied asset mix cushioned us,” said Femi Oyetunji, Continental Re’s Group Managing Director/CEO. “We continued to see sturdy growth and profitability in some regions and overall maintained strong group performance.”  

Total insurance premiums revenue rose by 22 per cent to N25.31 billion due mainly to an 18 per cent increase in non-life insurance contracts to N19.75 billion compared to N16.81 billion posted in the previous year. Interest income rose by 34 per cent to N1.5 billion compared to N1.12 billion in 2015.

Continental Re said its total assets rose by 36 per cent to N40.25 billion as against N29.67 billion reported in 2015. The increase in assets can be attributed to a significant accretion in cash and cash equivalents as well as other financial assets.

“Even as new risks emerge, we will persist in our efforts to grow our business by expanding our client base, building partnerships, and excelling in localized service delivery,” Oyetunji said.  “We are also focused on improving the profitability of our business through better risk selection, more efficient distribution, process improvement, cost optimization and judicious asset management.”

For the year under review, Continental Re said basic earnings per share rose to 28 kobo from 19 kobo in 2015. No dividend has been declared for the 2016 financial year.

Founded in 1985, Continental Re is the largest private Pan-African reinsurer outside South Africa. The company operates in more than 50 African countries via six regional offices in Nigeria, Cameroon, Botswana, Cote d’Ivoire, Kenya, and Tunisia. In February 2016, African Capital Alliance, a leading private equity firm, acquired majority shareholding in Continental Re from Sanham Finances, the insurance subsidiary of South Africa’s Sanlam Group.

Continental Re’s stock rose 8.11 percent to close at N1.2 per share at the close of trading at the Nigerian Stock Exchange on Wednesday.

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