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Custodian Investment Plc, a non-bank financial institution, had a particularly good first-quarter of 2022 in its insurance business, with earnings up year-on-year.
In fact, after adjusting for non-recurring one-time gain from prior year’s result, profits from continuing ordinary operations recorded 64.43 per cent growth to N2.18 billion in March 2022, despite operating in a challenging operating environment.
The company with interest in insurance, pension, and investment value-chain, is good in generating returns on the investment it receives from shareholders as return on equity rose to 13.40 percent in March 2020 from 9.50 percent the previous year.
Interestingly, the insurance division, which includes both Life and Non-Life segments, posted a positive real underwriting results of N2.61 billion as at March 2022, which validates improved underwriting results even amid inflationary pressures, high energy cost, and currency volatility.
The combined ratio improved to 75.55 percent in March 2022 from 79.72 percent the previous year, according to a calculation by MoneyCentral.
The company attributes the stellar performance to the resilience of all its subsidiaries, the diversity of its product offerings, commitment of its staff and the unwavering support of its board of directors.
Analysts are sanguine that the incremental contribution that will flow in from the group’s real estate business segment, which is being restructured to boost the fortunes of the company, will add impetus to earnings growth needed to pay shareholders’ bumper dividend.
It is noteworthy that the insurance segments earned more premium through firmer pricing, while the main drivers of improved profitability were lower losses and a fall in underwriting and operating expenses.
Gross premium written (GPW) was up 13.16 percent to N24.45 billion in March 2022 from N21.60 billion as at March 2021.
Gross premium income followed the same growth trajectory as it increased by 13.80 percent to N17.22 billion in the period under review from N15.13 billion the previous year.
The insurance business paid N4.26 billion to policyholders, and that represents an increase of 14.54 percent from 2020’s N3.68 billion. Claims ratio reduced to 39.32 in the period under review from 41.52 percent the previous year.