By Omobola Tolu-Kusimo
In spite of the coronavirus pandemic that defined the course of so many economies around the globe with Nigeria not being an exception, we remained on the part of growth as evident in our Annual Report and Accounts for 2020 Financial Year. This was achieved mainly due to the support at the Board level in addition to the consistent and dutiful work put in place by the Management and members of staff.
The resilience of our business model and strategy has enabled us to successfully weather the economic headwinds precipitated by the pandemic.
The drive to continue to uphold comprehensive growth strategy still forms the background upon which our company is built despite the harsh operating environment caused by the novel coronavirus disease (COVID-19) and the attendant economic and social challenges that characterised the industry within the year.
To this end, our organisation was able to record a Gross Premium Written of N11.12 billion in 2020 as against N10.8 billion in 2019. The Net Premium Income grew by 10 per cent from N5.9 billion in 2019 to N6.5 billion in 2020. Our net underwriting income grew by 9.7 per cent from N6.9 billion in 2019 to N7.6 billion in 2020. This performance resulted in a Profit Before Tax of N796 million and a Profit after Tax of N688 million in 2020, a 37 per cent increase when compared with N503 million recorded in 2019.
The size and quality of our balance sheet improved as the company’s total assets increased from N13.4 billion in 2019 to N14.8 billion in 2020 representing 10.5 per cent growth. Similarly, our earning per share also improved by 33.3 per cent from 6kobo in 2019 to 8kobo in 2020. The composition of our assets is well structured to position the company for better future performance.
Furthermore, I am delighted to report that the Return on Capital Employed (ROCE) of the company recorded a positive performance of 8.1 per cent in 2020 as against 5.6 per cent achieved in the corresponding year of 2019, while our investment and other income rose by 27 per cent from N468 million in 2019 to N622 million in 2020.
By no means, it was a very tough year for many businesses, but the fundamentals of our company are strong, and this is buttressed by our capacity to remain profitable despite the harsh economic conditions prevailing in the operating environment.
With this result, we remain a profitable brand. We will continue to re-engineer our strategy in line with current realities and as businesses globally are recovering and putting in place required investments to pull through, we will not rest on our oars but continue to improve on our performance.
Having successfully raised N1.4 billion in 2019, which grew our paid-up capital to N5.68 billion, we are now set to pursue our recapitalisation drive in order to achieve our objective of having a paid-up capital of N10 billion. To this end, we will be carrying out a special placement in the nearest future.
While it is estimated that the global economy will resume its growth in the year, it is anticipated that Nigeria will experience very modest growth with the IMF forecasting 1.7 per cent for the country. Innovation and efficiency gains will be the key pillars on which to improve our performance. We expect that 2021 will continue in the strides we made in our digital initiatives as our technology platforms and products continue to contribute to our performance and competitiveness. We also expect our cost optimisation initiatives to continue.
We will remain resilient and innovative in charting new avenues for growth. We will also remain committed to delivering value to all our stakeholders in spite of the numerous social, economic, and environmental challenges faced by the communities we serve. We have been able to survive the rough tide through appropriate strategies built on financial discipline and unwavering support of all our stakeholders. Our continuous effort to further capitalise the company, is considered a veritable exercise that will improve our underwriting capacity and subsequently lead to improved profitability.
There is no gainsaying the fact that 2020 remains unprecedented and has been traumatic as people and businesses across the globe continue to grapple with the effects of the pandemic and the associated recession. STI remain committed to its stakeholders, customers, and the nation’s future, as we continue to provide the required support and services in overcoming the challenges of the pandemic while we strive to achieve a sustainable and inclusive recovery.
Sovereign Trust Insurance Plc commenced business in January 1995 following the restructuring and recapitalisation of the then Grand Union Assurances Limited. We operate through a network of branches nationwide with our Head Office on 17, Adetokunbo Ademola Street, VI, Lagos. The company is licensed as an insurer by the Federal Government with authority to underwrite all classes of non-life business.
It is the intention of the company to be a highly professional organisation providing unique risk management services as well as improved claims settlement procedure among others.
To achieve these objectives, we have assembled a vibrant and purposeful management team made up of highly experienced and result-oriented professionals who are fully poised and determined to contribute meaningfully towards the upliftment of insurance practice in Nigeria. We are also fully computerised and maintain a good cash reserve for claims settlement.