Royal Exchange Plc, Nigeria’s premier insurance and financial group, has announced a gross premium income of N10.79 billion for the 2015 financial year, which represents 14 per cent increase when compared with N9.43 billion in the corresponding period of 2014.
According to the firm, the net claims expense for the year amounted to N3.04 billion, representing 25 per cent increase against N2.43 billion achieved in 2014.
Meanwhile, underwriting expenses decreased by four per cent from N2.74 billion in 2014 to N2.64 billion in the period under review, while management expenses stood at N3.27 billion in 2015 against N3.09 billion recorded in the previous year with an increase of six per cent.
Addressing shareholders during the 47th yearly general meeting in Lagos, the Chairman of the company, Kenneth Ezeanwani Odogwu, said the group experienced a loss before taxation of N897 million largely due to insurance contract liabilities’ provision made in accordance with the International Financial Reporting Standard (IFRS).
According to him, IFRS requires that we value the liabilities at market interest rate. When the interest rates rise, the value of liabilities will fall, and when the rates fall, the value of our liabilities will rise.
“Therefore, when that value of liabilities fall there is a release of profits and when the liabilities rise there is a transfer from the profits to the reserves,” he stated.