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Business News of Friday, 2 May 2008

Source: GNA

Enterprise Insurance Company to adopt holding company structure

Accra, May 2, GNA - Enterprise Insurance Company is to adopt a holding company structure to enable the different operational arms to focus more on their areas of comparative advantage to deliver profit. Board Chairman, Trevor Trefgarne told the 36th Annual General Meeting of shareholders that the new structure was expected to bring financial and operational benefits to the growth of the organization. However, before the proposal is formally tabled the company will seek to ensure that the tax and legal issues involved are properly considered.

Mr. Trefgarne said the Insurance market was becoming increasingly competitive with new entrants and revitalized existing participants and to ensure that EIC stay ahead of the competition, there was need for an organization that was able to operate responsively to the needs of customers. EIC's underwriting profit grew by 70.3 per cent in 2007 as a result of improved underwriting, interest, net premium, controlled expenses and efficient claims management. The profit jumped from 2.7 million GH cedis in 2006 to 4.6 million GH cedis in 2007.

Shareholders' Funds also went up from 10.1 million GH Cedis to 13.3 Million GH cedis, a rise of 31.6 per cent while total assets also increased by 40 per cent. The growth was on account of good performance in the general business and Life Assurance sector, which contributed 38 per cent to the group gross premium. Group Life premium income grew by 64 per cent last year from 0.24 million GH cedis to 0.40 million GH cedis. Mr. Trefarne described the continued growth in the Enterprise Life Assurance Company as encouraging. At the end of last year ELAC had over 60,000 policies in force served by 88 full time staff and about 400 agents. New business acquisition accounted for 26 per cent of Gross Premium.

Mr. George Otoo said the company would continue to focus on the areas that would yield the maximum return for its shareholders. EIC will also consider the development of its real estate potentials. Currently, Genesis Real Estate Consultancy of which EIC is a shareholder is putting proposals for the redevelopment of landed properties. "There is additional value in our real estate assets that is not fully reflected in the balance sheet values until new professional valuations are obtained," Mr Otoo said. To better the position of the company, Mr Otoo said EIC was subjected to independent and international financial rating in 2006 by Global Credit Rating Company. EIC was rated AA- on a scale ranging from AAA (highest) to D (lowest).