Cornerstone Insurance Plc said it has commenced branch optimization exercise to improve the efficiency and profitability of its operations.
Chairman of the company, Mr. Segun Adebanji, who disclosed this at the company’s annual general meeting in Lagos, said that the exercise is intended to deliver profitable branch operations relative to their income generating capacities.
Adebanji told shareholders that the company’s unaudited financial accounts for half year 2018 recorded gross premium income of N6.4 billion, a growth of 39 percent over the same period in 2017. Underwriting profit stood at N597 million against loss of N67 million as at 30 June, 2017. While the company recorded a profit before tax of N251 million compared to the loss before tax of N869 million recorded in the corresponding period in 2017.
He said that management expenses reduced during the year due to strict cost management regime, stating, “The strict cost management regime introduced by the board of directors and management during the year yielded some success as management expenses reduced by five percent for the company despite inflationary pressures. “The board of directors and management have instituted rigorous cost control measures, some of which have started yielding positive results.
Necessary actions have been taking to align our risk portfolio away from the unprofitable accounts that led to heavy losses. Where re-pricing has not been possible, we exited or reduced our exposure significantly.
Notwithstanding the significant regulatory bottlenecks, we continue to intensify our efforts to increase the proportion of our revenue sourced from retail segments which have traditionally been more profitable.
The board and management remain optimistic about the future of the company and will continue to work in ensuring that the early positive signs of 2018 are maintained.
“The company tightened its risk acceptance parameters as competitive pressures have driven premium rates to uneconomic levels while certain regulatory bottlenecks have hampered the implementation of the company’s expansion plans in the retail and mass market segments,” Adebanji stated.
