By Patience Saghana
Crusader Insurance Plc has generated a premium income of N3.6 billion for the year ended December 31, 2008.
The 2008 figure represents of 65 per cent rise over N2.2billion posted in 2007. Total income also increased from N3 billion in 2007 to N3.74 billion last year.
However, profit before tax declined from N1.57 billion to N372.7 million. Earnings per share also dropped from 36.27 kobo to seven kobo.
At the 39th annual general meeting of the company held in Lagos, Prof. Monsur Kenku, chairman of the company, stated that the companyâ€™s overall performance fell below expectations mainly due to the decline in investment income arising from the downturn in the capital market and the marking to market of the equities portfolios of the two insurance companies and the extraordinary loss occasioned by the suspended public offer and the cancelled rights issue.
He said: â€œThe companyâ€™s exposure to the capital market also cost the company N159.9 million in profit write-off while the diminution in the value of the companyâ€™s equity portfolio shaved off N729.7 million in equity revaluation reserves and shareholdersâ€™ fundâ€.
Kenku told stakeholders at the AGM that the continuing difficulty in collecting premium in the industry and the commitment to the companyâ€™s stringent provisioning standard for receivables continue to impact negatively on profit particularly the general insurance business.
Thus, he said that the performance during the period under review, the board recommended a bonus issue of one ordinary share for every 10 shares currently held in the company. The bonus translates to N410.96 million ordinary shares of 50 kobo each amounting to N205.5 million.
Kenku said, â€œThe board is taking steps to ensure that a strong platform is maintained for the future prosperity of the business. The diversification into other areas of the financial services industry is still being pursued vigorously while the existing insurance businesses are being re-organised to achieve greater efficiency and effectiveness.
According to him, â€œour real estate portfolio is being re-evaluated in the light of our inability to raise the projected capital meant to drive the full exploitation of our portfolio holdings. The slow down in the economy also demands of us a more prudent exposure to the real estate sector, marginal assets are being sold, while the major assets will be developed in a carefully scaled manner to ensure better than average returns. Barring any delay in approvals, we expect the re-development of our Kingsway Road property to be commenced possibly before the end of the year.â€
He assured shareholders that once the overhang of the issues militating against the banksâ€™ performing their roles effectively is addressed, a more rational investment climate will emerge in 2010. â€œWe therefore believe that value investors will recoup most of the losses sustained in 2008 and 2009.â€