No doubt, the year 2017, started on a very shaky note shrouded in uncertainty and a very bleak business outlook for some insurance companies, riding on the premise that some of them fell short of their expectations and aspirations in the past year as a result of the negative effects of the recession that characterized the Nigerian economy in 2016. Going into 2017, was filled with a lot of palpitations and an unsure business environment for many corporate organizations and most especially, the insurance companies who, most of the times, are the worst hit in any dwindling economy.
However, for Sovereign Trust Insurance Plc, things are actually looking up considering the company’s first quarter performance in 2017. On a careful examination of the unaudited financial Statements which was recently released by the organization, one can only say that indeed, it has been a season of a good harvest.
The total Gross Premium written in 2016, amounted to N2.3b in the first quarter of the year while in 2017, the total Gross Premium written is put at N4.1b in the same period under review. In the same vein, the Gross Premium income grew from N1.8b in 2016, to N3.8 billion in 2017. Premium ceded to reinsurers in 2016, was N777m while in 2017, it rose to N2.1b. Net premium income was N1.1b in the first quarter of 2016, and in 2017, the company’s underwriting income rose to N1.6b in the first quarter of the same period under review.
The Underwriting Firm grew its commission income from N150m in 2016, to N200m in 2017, Q1. The net underwriting income leapt from N1.2b in 2016, in the first quarter to N1.8b in the same period under review. Expectedly, net claims expenses rose from N331m in 2016, to N562m in the first quarter of 2017, while underwriting expenses also grew from N359m in Q1 2016, to N546m in Q1 2017. The underwriting profit rose from N571m in 2016, to N746m in the same period under review in 2017. Investment income also grew from N121M in 2016, to N135m in 2017, Q1.
Interestingly, the company’s Management Expenses reduced from N402M in Q1 2017, to N369m in the same period in 2017. One can attribute this development to the Management Team’s commitment to reducing cost of operation as much as possible with the ultimate aim of delighting its shareholders. The profit before income tax grew considerably from N241m in Q1 2016, to N488m in the same Q1 in 2017, while profit after income tax also enjoyed a leap from N215m in 2016, to N437m in Q1 of 2017. The total assets of the Underwriting Firm as at March 31, 2017, stands at N10.2b while same was N9.5b in the first quarter of 2016.
Notwithstanding the harsh operating environment that has beclouded the operations of so many insurance companies and other corporate organizations in the first quarter of the year especially at a period that the Nation’s budget was far delayed for approval by the Government. Sovereign Trust Insurance Plc has been able to record meaningful appreciation in all its financial indices going by its first quarter unaudited financial statements. The future indeed, looks very promising.