Enterprise Insurance organises AGM

ENTERPRISE Insurance Company Limited (EICL) has organised its Annual General Meeting for the year ended 2008 and celebrated its AA- rating as an achievement of the company’s 80 years of excellence in the insurance industry.
It was rated AA- by the Global Rating Company in South Africa for having a high claiming ability, and signing up nearly 12,000 new client in 2008.
The company, established in 1924 in the United Kingdom, was the first insurance company to be listed on the Ghana Stock Exchange (GSE) in 1990.
The Chairman of the Company, Mr Trevor Trefgarne in his address, said the company had been investigating the best way to structure the group and its subsidiaries for the future.“We have prepared a presentation on the proposed holding company structure”, he stated and pointed out that the structure was expected to create financial and operational benefits for stakeholders.
Presenting the consolidated result of EICL for the year ended 2008, Mr Trefgarne announced that the group had adopted International Financial Reporting Standards with effect from the 2008 financial year.
The groups financial performance in the year, he said, reflected 20.3 per cent growth in their general business and as well as 52.0 per cent growth of Life Assurance business in their respective revenue generating activities.
The Managing Director of the company, Mr George Otoo, disclosed that there was a significant change in the structure of the insurance industry due to the implementation of the new Insurance Act 724 of 2006.
“By the close of 2008, the market had 19 non-life and 16 life companies, two reinsures and 35 Broking firms”, he stated, and pointed out that the increase in the number of players, particularly in respect of non-life insurers and Broking firms heightened the already intense competition in the industry.
That, according to Mr Otoo, led to further softening of rates as player scrambled for the same insured businesses, which led to premiums been driven very low in the face of escalating claims and other operational expenses.
“In the long run, if this continues, most companies may not be able to build up enough reserves to pay claims” he noted, and pointed out that the strong capital formation would therefore continue to elude the industry as short term results remained the focal point in the industry.
On the company’s operating performance, he said though they recorded a substantial increase in gross premium, high claims frequency and severity greatly affected their overall operating performance.
“Gross premium rose from GH¢16.5 million in 2007 to GH¢19.9 million in 2008, an increase of 20.6 per cent. Net premium income recorded an increase of 13.0 per cent from GH¢7.7 million in 2007 to GH¢8.7 million in 2008”, he stated.
Mr Otoo said the company recorded a total of 11,719 new businesses in 2008 culminating in a premium of GH¢6.7 million, representing 33.8 per cent of total gross premium, an indication of increased sales and market penetration.
He said the year 2008 produced virtually no underwriting profit as claims incurred increased significantly from GH¢2.7 million in 2007 to GH¢4.3 million in 2008.
Nonetheless, he said the company recognised claims payment as its bedrock in their long term survival and profitability and gave the assurance that they would continue to honour genuine claims promptly, however they would continue to review and reset their strategy on the Motor business to address the company’s dwindling profitability in the face of the current intense price competition.
The group wrote a total gross premium of GH¢35 million in 2008, up by 32.2 per cent from 2007 level of GH¢ 26.7 million.