Regulators fine Cornerstone N128m

The penalties by regulatory bodies sweeping across the insurance sector has caught up with Cornerstone Insurance Plc as it was compelled to cough up about N128 million as fines for operational flaws. Lamenting the situation at the company’s Annual General Meeting (AGM) in Lagos, some shareholders said that it was painful to see on record N128 million fine paid by the company to the National Insurance Commission(NAICOM) and other regulators because of various offences. Specifically, one of the shareholders, Mr. Akinsonya Solomon, noted that fines heaped on operating firms by the regulators were weighing heavily on them, as virtually the firms have been fined for one offence or the other this year.

He said that it was unbecoming of the Financial Reporting Council to be encating laws that keep operating firms in the system very uncomfortable. Mr Robert Igwe, also a shareholder, demanded that the NIA as the umbrella body of underwriters take up the issue of statutory deposit of the industry lying idle with little or no interest with the Central Bank of Nigeria (CBN) to the lawmakers.

He observed that the huge amount could yield good interest to the various firms if used in business, adding that on the alternative, the CBN should pay interest commensurate to the quantum of money deposited by the various companies. Meanwhile, Cornerstone’s financial reports showed that its profit after tax grew by 11 per cent from N860.36 million in 2013 to N946.48 million in 2014, while its profit before tax increased by 20 per cent from N870.2 million in 2013 to N1.04 billion in 2014. The Group Chairman, Adedotun Sulaiman, said: “The financial performance in 2014 is a reflection of our deliberate focus on profitable underwriting and investment performance, while cautiously pursuing top-line growth.”

While the gross premium written stood at N5.21 billion in 2014, the gross premium income grew by 12 percent, moving up from N4.62 billion in 2013 to N5.19 billion. Its underwriting profit also rose by 60 percent from N939 million to N1.50 billion, even as the company paid claims totalling N1.23 billion during the year under review. Sulaiman also said that the group achieved a 12 percent growth in investment income from N890 million in 2013 to N999 million in 2014. Similarly, shareholders equity appreciated by 12 percent from N6.90 billion to N7.76 billion, while retained earnings inched up from a negative N555 million in 2013 to N99 million in 2014. The underwriting firm also paid a dividend of 2 kobo per share to its shareholders for the 2014 financial year.