Reliance Insurance Trust Corporation (RITCORP), has seen its profits after tax for the year 2016 drop by 31% when compared to the 2015 figures.
This was disclosed to shareholders of the company by Board Chairman, Alhaji Mohamed Babatunde Cole at their Annual General Meeting (AGM).
He explained that the 31% decrease was due mainly to huge medical claims and the high cost in administering the medical scheme. “This is because premiums remained the same and did not reflect the effect of the depreciation on the Leones while the cost of services went up. However, management is keeping these costs under constant review as well as setting itself a higher premium income budget so as to absorb unavoidable increases in claims.”
Chairman Alhaji Cole pointed out that, “There are limited opportunities for investments in Sierra Leone. The Company has started building a five-storey office building at 5 Lamina Sankoh Street, Freetown. This will help safeguard depreciation and will be rented out for additional income to the Company.”
He noted that the macroeconomic situation remained challenging. Inflation had increased significantly in 2016 to 17.4% from 10.1% in 2015, which he explained “was driven by 60% increase in retail fuel prices as well as exchange rate depreciation, which was 26.4% in 2016, which in turn was driven by continued low exports and a decline in donor inflows.”
“The microeconomic outlook is promising” he opined, with “both iron ore and non-iron ore real Gross Domestic Product growth expected to gradually increase beyond 7% in 2021.”
Alhaji Tunde Cole said foreign investments in the agricultural and agri-business sectors, especially in palm oil, combined with structural reforms, hopefully will contribute to an improved business and a lower cost of doing business.
“Inflation is targeted to recede to 8% by the end of 2019, as the one-time impact of fuel price increase recedes, and the recent tightening of monetary policy continues as needed to meet this target.”
On the new Insurance Act 2016, Chairman Tunde Cole said “we are optimistic that the law, when enforced, will enhance the insurability of risks and thereby increase our premiums. Also, the law minimizes our credit exposure as it stipulates that premiums should be paid at the inception of a policy.”
“In spite of the challenging economic environment during the year under review, the Company was able to maintain its leadership position in the insurance market.”
“We maintain useful contacts with professional colleagues, keep abreast with developments in the regional and sub-regional markets and share experiences, which help in our operations. We enjoy an exceedingly good beneficial relationship with our re-insurance brokers CK re. Our policies through their services continue to receive excellent re-insurance covers both in the African and European Markets.”
The Managing Director, Alice Onomake, commended the staff for maintaining a high standard of service reflecting the successful staff training and development programs locally and internationally. The 64 staff members, she said are the strength of the Company, adding that they will continue to train them and keep them happy as they are the backbone of the success of the Company.
The Board of Directors recommended a dividend of 80 cents per share to members on the Company’s Register as at 31 December 2016.
Two new Board members were nominated, Balla Ahmed Kamara, a surveyor and Gaiva Lavalie, a civil engineer.