Aureol Insurance announces 10% loss in premium income


July 27, 2015 By Ibrahim Tarawallie

Chairperson of the Board of Directors of Aureol Insurance Company (AIC) on Friday (July 24) revealed that the company has lost approximately 10% of its premium income, attributing this to the outbreak of the Ebola virus disease.

Delivering her statement at the company’s 24th Annual General Meeting hosted at the Atlantic Hall of the National Stadium, Yasmin Fofanah noted that it could have been worse had they not adopted “innovative survival strategies” in response.

She said the prolonged period of low interest rates caused earnings on insurance funds to decline, thereby exacerbating the profit problems of the industry which, according to her, continues to have a negative effect on their investment portfolio.

She revealed that gross written premium for the period to 31st December 2014 was Le18.634 billion as compared to Le20.56 billion for the corresponding period to 31st December 2013, representing a decrease of 9.37%.

Mrs. Fofanah informed shareholders that claims incurred for the current year were Le4.955 billion as compared to Le5.381 billion for the corresponding year to December 2013, with a decrease of 7.92%.

“Profit before tax for the period to 31st December 2014 was Le2.932 billion as compared to Le3.835 billion, a decrease of 24% for the corresponding period to 31st December 2013,” she reported. “Earnings per share decrease from Le1.50 for the period 31st December 2013 to Le1.09 for the corresponding period to 31st December 2014; a decrease of Le0.41.”

Madam Fofanah opined that as they indicated last year, in line with their capital mobilization efforts directed at achieving the minimum statutory requirement, the Board of Directors has recommended the issue of additional shares to shareholders in the form of bonus of 1 share for every 3 shares held in the company as at 31st December 2014.

Looking ahead, the AIC Board Chairperson foresees good prospects for the company in that they anticipate profit levels would be sustained subject to large claims being kept within normal bounds and profitability is not affected by severe movements in exchange rates, significant changes in fiscal parameters or other exceptional factors.

“We intend to continue to underwrite profitably and consistently and to pay dividends regularly to our shareholders, as well as to enhance shareholder value,” she said and added that experience has shown that the company’s operation combines capacity, integrity, and more importantly good judgment in a manner unique in the insurance business.

She ended up by stating that despite broad diversification, the company continues to play an active role in investing in government securities as stipulated in the Insurance Act.