Cornerstone Insurance Plc has paid about N6.3 billion claims to policyholders who suffered insured risks in its 2017 financial year, a development that repositioned the customers to their financial positions before the incidents.
Speaking at the 2017 yearly general meeting in Lagos yesterday, the company’s Chairman, Segun Adebanji, said the claims paid was N2.9 billion higher than N3.4 billion claims paid in the 2016 financial year.
Claims recovery, according to him, was N1.4 billion, against N1.2 billion in 2016, noting that a sharp increase in claims expenses led to an underwriting loss of N2 billion, compared to N696 million in 2016.
The net claims ratio for 2017, he stated, stood at 117 per cent, against 73 per cent for the previous year.
Also, the largest contributors to the claims figure were the oil and 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.
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 company tightened its risk acceptance parameters, as competitive pressures drove 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 added
Source: Guardian News