Sovereign Trust Insurance posted N1.95bn profits in 2009

However, the company’s profit before tax stood at N13.06 million as against N415.65 million it achieved last year. Chairman of the company, Chief Ephraim F. Faloughi explained to shareholders at the company’s 15th annual general meeting held in Lagos that the “significant reduction in the profit level was attributable to a sum of N358 million […]

However, the company’s profit before tax stood at N13.06 million as against N415.65 million it achieved last year.

Chairman of the company, Chief Ephraim F. Faloughi explained to shareholders at the company’s 15th annual general meeting held in Lagos that the “significant reduction in the profit level was attributable to a sum of N358 million written off as losses relating to diminution in value of capital market related investments, N291 million written off as outstanding premium in line with NAICOM guidelines and a sum of N247 million deferred charges that was also fully written off…”

He said that was to conform with international best practices. Consequent upon the above, the company recorded a profit after tax of N4 million as against N360 million recorded last, year he said.

He said the company however recorded a gross premium of N4.44 billion for the year representing some 16.50 percent increase over the N3.81 recorded in 2008.

The chairman however assured that the fundamentals of the business still remained strong as evidenced in the growth in premium income and underwriting profit adding that the company will bounce back in the next year.

According to Faloughi, the company will soon embark on right issues to existing shareholders to raise funds for the company’s operations.

Other initiatives to raise funds by the company, he said include private equity and/or debt capital through local and foreign sources.

The shareholders didn’t get a dividend because of the little profit posted by the company.