Cornerstone Insurance Plc underwriting income hit a year high, thanks to strong growth in revenue that was buoyed by innovative and market penetrating products even amid a challenging environment
For the first six months through June 2021, the insurer’s underwriting profit surged by 394.77 percent to N2.52 billion from N509.40 million as at June 2020. That’s the highest in five years even though the company operates in an unfavorable underwriting environment.
The growth in underwriting income was largely driven by increases in premium income that helped compensate for rising claims, reinsurance, and management expenses.
Gross premium income was up 44.90 percent to N9.80 billion in the period under review from N6.76 billion the previous year.
Non-life Insurance premium, which makes up 77.24 percent of gross premium, increased by 57.38 percent to N7.57 billion in June 2021 from N4.81 billion as at June 2020.
Net premium income followed the same growth trajectory as it surged by 102.15 percent to N4.95 billion in the period under review from N2.45 billion the previous year.
The company said one of its core values is empathy and this is reflected in the quality of service delivery to its customers at all times.
“Our customers are the reason we are in business, to this end, we focus on delivering quality service at all times,” said the company.
In 2020, the insurer had received an approval in principle from the National Insurance Commission to start a composite Takaful insurance company.
It added that the Cornerstone Takaful Insurance Company Limited would be a subsidiary focused on selling both family and general Takaful products in Nigeria.
There has been significant improvement at the rate in which the insurer generates premium income and how much it pays out as claims.
For instance, the combined ratio has improved to 106.15 percent in the period under review from 166.17 percent the previous year.
Net claims ratio for the period under review was at 40.80 per cent, a sharp reduction from 68.16 percent the previous year.
The company said loss ratio has been stable since it put in place stricter risk acceptance parameters, as competitive pressures have driven premium rates to uneconomic levels.
A N1.01 billion fair value loss on financial assets led to a 20.40 percent drop in net income to N796.46 billion.
Nigerian insurers are booking huge fair value loss on bond investment due to a low yield environment and unstable fixed income market.