Ghana Reinsurance PLC (Ghana Re) held its 21st Annual general meeting (AGM) in Accra last week, October 1, 2024. Majority shareholder, the Government of Ghana, commended the board, management and staff of the company for its remarkable performance for the 2022 financial year.
Mr. George Otoo, Chairman of the Board, in his statement for the year ended December 31, 2023, informed the meeting that the year 2023 marked the beginning of a new era in financial reporting within the insurance and reinsurance sector; the introduction of International Reporting Standard (IFRS) 17 – ‘Insurance Contracts’ – which replaced IFRS 4 with retrospective application.
George Otoo stated that the group accordingly adopted the IFRS 17 from January 1, 2023.
The group’s composite (Life and General Business) insurance revenue under IFS 17 for 2023 was GH¢684.39m representing a growth of 25 percent over GH¢545.00m recorded in 2022 (restated). General Business contributed about 94 percent of the group’s insurance revenue, representing GH¢642m in absolute terms.
The Life portfolio contributed the remaining 6 percent of the total insurance revenue which represents GH¢42m. The largest contributor to this key achievement is the insurance revenue from Fire Business, which contributed about 54 percent to the insurance revenue generated from General Business and 51 percent to the total insurance revenue reported for the group.
The total insurance service expense recorded for the year 2023 was GH¢509.87m compared to GH¢481.48m in 2022 (restated), representing a 6 percent increase over the year 2022.
The incurred claims portion of the insurance expense, which comprise gross claims and changes that relate to past service adjustment to Liability for Incurred Claim (LIC), was GH¢486m in 2023 compared to GH¢471m recorded in 2022, representing an increase of 3 percent.
The group’s management expense for the period reduced from the 2022 figure of GH¢85.65m to GH¢72.54m in 2023, representing a 15 percent reduction. Management expense ratio reduced from 16 percent in 2022 to 10 percent in 2023 due to the reduction in impairment charge on Due from ceding and retroceding companies.
Notwithstanding the effect of the Domestic Debt Exchange Programme (DDEP), the group’s investment income of GH¢72.91m in 2023 represented a 4 percent increase over GH¢70.35m reported in 2022.
The increase was supported by not only the improved yields on money market instruments but also the increase in assets. The growth in investment income was largely driven by interest earned on fixed income securities.
The group’s profit before tax in 2023 was GH¢321.94m compared to GH¢61.43m in 2022 (restated), representing an increase of 424 percent; profit after tax also saw a significant increase from GH¢43m reported in 2022 (restated) to GH¢225m in 2023, representing an increase of 423 percent.
The impressive performance in profit is mainly attributable to the movement in insurance contract liability balances arising from adoption of IFRS 17, reduction in management expenses and gains on revaluation of investment properties.
Based on the assessment carried out by the board on the group’s financial performance for 2023, a dividend of GH¢25m was paid to the sole shareholder, Government of Ghana, compared to GH¢5m paid for 2022. The total dividend paid to the shareholder since 2017 amounts to GH¢79m.
The chairman indicated that the year 2023 marked the final year of the group’s three-year strategic plan (2021-2023), with the group making remarkable achievements in its set objectives – notably the achievement of gross written premium of GH¢712.81m compared to the target of GH¢531.34m and the opening of a contact office in Morocco.
He further stated that the group has ushered in a new 3-year strategic plan from 2024-2026, anchored on three main pillars. ROE also increased significantly to 47 percent in 2023 from the set target of 20 percent. At the end of each financial year, there will be a review of the target set for ROE to ensure it does not fall below actual performance during the period.
