By Ikeoye Oyetoro
Sovereign Trust Insurance Plc said its profit before tax stood at N13.06 million as against N415.65 million achieved in the year 2008 while the total assets rose to N5.26 billion at the end of 2009 financial year as against N5.37 billion recorded in the year 2008.
Speaking at the company’s 15th Annual General Meeting (AGM) Chairman of Sovereign Trust Insurance, Chief Ephraim Faloughi, disclosed that the significant reduction in the profit level was attributed to a sum of N358 million written off as losses relating to diminution in value of capital market related investments.
Also, N291million written off as outstanding premium in line with NAICOM guidelines and a sum of N247 million deferred charges that was also fully written off at 2009 year end was also responsible for the loss.
However, the company recorded a gross premium of N4.44 billion for the 2009 financial year as the figure rose by 16.50 per cent from N3.81 billion recorded in 2008 to N4.44 billion in 2009 while the underwriting profit for the year rose by 25.40 per cent from N1.56 billion recorded in 2008 to N1.95 billion in 2009.
The company recorded a profit after tax of N4m as against N360 million posted in the previous year due to the global financial crises and the challenges in the larger economy.
According to him, the consequence of the challenges in the economy took its toll on the insurance industry as the effect of the challenges was apparent on premium generation capabilities, liquidity, capitalisation and profitability saying premium generation and collection dwindled within the period due to general lull in economic activities.
He said, “The impact of the harsh operating terrain in our bottom line poses serious challenge on our capability to declare dividend for the year ended adding that the company is confident that this sacrifice will be adequately rewarded in the future and the company’s action will translate to better values for the shareholders in the coming year.”
Faloughi stressed that the company is working relentlessly to review the appropriateness of strategies in delivering their corporate objectives saying the company’s distribution chain will be enhanced to ensure that services are placed right at the doorstep of customers.