Strong earnings fail to lift Consolidated Hallmark share price
Consolidated Hallmark Insurance Plc (www.chiplc), a General Business and Special Risks Insurance underwriting firm grew profit for 2019 by 56.6% to N636.934 million.
The insurer with market cap of N2.926 billion on 8.13 billion shares outstanding traded below nominal value in the last 7 days trades. In the period, the stock peaked at 39 kobo.
Meanwhile, the result shows that the insurer’s gross premium written in 2019 increased from N6.864 billion in 2018 to N8.691 billion.
In its unaudited financial statement made available to the Nigerian Stock Exchange, the insurer raise earnings per ordinary shares from N5.79 to N7.83.
The result shows that gross premium income expanded by 27.6% year on year to N8.31 billion in 2019 from N6.512 billion in the comparable year in 2018.
Meanwhile, reinsurance cost bloated just as expected with increase in business but it outpaced growth recorded in income side.
In 2019, total sum of N3.233 billion was expended as reinsurance premium which was 44.39% more above N2.239 billion used for reinsurance in the comparable period in 2018.
Further insight into the insurer’s number indicates that reinsurance cost as proportion of gross premium income increased year on year.
In 2018, Consolidated Hallmark expended 34.38% of its gross premium income on reinsurance but a year after it spiked to 38.90%.
The company incurred N1.88 billion as claim in the year. This was less than 5% growth when compare with N1.799 billion incurred in 2018.
Breakdown of claim incurred shows that the insurer directly paid N2.883 billion claim in 2019 but collected N1 billion credit from reinsurance which offset its payment to customers.
Compare with total claims paid in 2018, it is observed that the insurer claim expenses dropped by about 40%.
A total sum of N4.787 billion claim was met in 2018, but dropped to N2.883 billion in 2019. Reinsurance recoveries in 2018 was N2.987 billion compare to N1 billion received in 2019.
Underwriting expenses however surged by 23.18% from N1.622 billion in 2018 to N1.98 billion a year after.
Consolidated Hallmark Plc total assets berthed at N11.047 billion as the company looks to December 2020 recapitalisation exercises.
Strong earnings fail to lift Consolidated Hallmark share price by Ogochi Ndubuisi
