Cornerstone Nigeria Insurance Plc, a company that sells life and non-life products in Nigeria has recorded impressive growth in its third quarter profit, analysis of the financial statement shows.
For the first nine months through September 2014, the insurance giant recorded a 10.69 percent increase in net premium income (NPI) to N3.83 billion from N3.46 billion the same period of the corresponding year (Q3) 2013.
Similarly, gross premium income (GPI) jumped by 6.23 percent to N4.31 billion compared to N4.05 billion the preceding year while gross premium written increased by 8.70 percent to N4.82 billion.
Of the N4.31 billion gross insurance premium income, Cornerstone’s non-life segment contributed 71.69 percent to the total figure; life contributed 26.84 percent while the balance went to its Halal Takaful business.
It should be noted that the company is among the few insurers making giant strides in the areas of retail distribution and Islamic insurance using its Takaful window.
In order to deepen insurance penetration and literacy in Africa’s largest and most populous nation Nigeria, National Insurance Commission (NAICOM), in 2013 introduced the Takaful insurance.
Analysts say Takaful Insurance Industry will contribute more to the Gross Domestic Product (GDP) given the population of Muslims across the country.
This policy is expedient as the Insurance sector’s 0.6 percent contribution to the Nigerian GDP is abysmal.
Today, the target market of Takaful in Nigeria is large and recent reports from the few existing window operations indicate the attainment of 70 percent penetration.
Cornerstone is keeping shareholders on the edge of their sit as they will be awaiting dividends as profits spiked. The Insurer’s profit after tax (PAT) surged by 98.05 percent to N605.70 million compared with N305.82 million the preceding year.
Operating expenses were up by slightly 2 percent to N1.48 billion in Q3 2014 from N1.45 billion the preceding year while net underwriting expenses were up by 15.65 percent to N656.87 million.
Total assets increased by 3.67 percent to N14.67 billion in the review period as against N14.15 billion last year while total equity increased by 8.69 percent to N7.50 billion.
In order to increase its share of the market and give and magnify shareholders’ earnings, Cornerstone has received approval from its owners to acquire FIN Insurance Company Limited, one of Nigeria’s insurance firms and a subsidiary of FCMB.
The deal would see the Nigerian Insurer purchase as much as 3.3 billion worth of shares of FIN Insurance Company.
Cornerstone’s share closed at N0.5 on the floor of the NSE while market capitalization was N4.41 billion.
BALA AUGIE
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