SOVEREIGN TRUST INSURANCE : QUARTER 2 - FINANCIAL STATEMENT FOR 2023

SOVEREIGN TRUST INSURANCE PLC

IFRS 17 UNAUDITED FINANCIAL STATEMENTS 30 JUNE 2023

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SOVEREIGN TRUST INSURANCE PLC

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2023

CONTENTS	PAGE
Corporate Information	1
Financial Highlights	3
Certification Pursuant to Section 60 (2) of Investment and Securities
Act No. 29 of 2007	4
Summary of Significant of Accounting Policies	5
Statement of Profit or Loss and Other Comprehensive Income	40
Statement of Financial Position	41
Statement of Changes in Equity	42
Statement of Cashflows	43
Notes to the Financial Statements	44

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SOVEREIGN TRUST INSURANCE PLC

FINANCIAL HIGHLIGHTS

FOR THE YEAR ENDED 30 JUNE 2023

	2023	2022
	₦'000	₦'000	% Change
Statement of profit or loss and other
comprehensive income
Insurance revenue	12,234,201	9,174,657	33%
Insurance service expenses	(4,349,303)	(4,498,637)	-3%
Net expenses from reinsurance contract held	(7,599,469)	(4,330,622)	75%
Profit before income tax	560,157	517,267	8%
Profit after income tax	427,330	387,086	10%
Statement of financial position
Total assets	17,725,699	15,570,524	14%
Total liabilities	6,702,436	5,462,599	23%
Total equity	11,023,262	10,107,925	9%
Insurance contract liabilities	4,202,256	3,200,494	31%
Per share data:
Basic earnings per share (kobo)	4	3	25%

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SOVEREIGN TRUST INSURANCE PLC

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2023

CERTIFICATION PURSUANT TO SECTION 6 0(2) OF INVESTMENT AND SECURITIES ACT NO. 29 of 2007

We the undersigned hereby certify the following with regards to our financial statements for the year ended 30 June 2023 that:

1. We have reviewed the report;
2. To the best of our knowledge, the report does not contain:
3. 1. Any untrue statement of a material fact, or
   2. Omit to state a material fact, which would make the financial statements misleading in the light of circumstances under which such statements were made;
4. To the best of our knowledge, the financial statements and other financial information included in the report fairly present in all material respects the financial condition and results of operation of the Company as of, and for the years presented in the report.
5. We:
6. 
   (i) Are responsible for establishing and maintaining internal controls.
   (ii) Have designed such internal controls to ensure that material information relating to the Company is made known to such officers by others within those entries particularly during the period in which the periodic reports are being prepared;
   (iii) Have evaluated the effectiveness of the company's internal controls as of date within 90 days prior to the report;
   (iv) Have presented in the report our conclusions about the effectiveness of our internal controls based on our evaluation as of that date;
7. We have disclosed to the auditors of the Company and Finance, Investment and General- Purpose Committee:
8. 
   (i) All significant deficiencies in the design or operation of internal controls which would adversely affect the Company's ability to record, process, summarize and report financial data and have identified for the company's auditors any material weakness in internal
   controls, and
   (ii) Any fraud, whether or not material, that involves management or other employees who have significant role in the Company's internal controls;
9. We have identified in the report whether or not there were significant changes in internal controls or other factors that could significantly affect internal controls subsequent to the date of our evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Mr. Kayode Adigun		Mr. Olaotan Soyinka
Chief Financial Officer		Managing Director/CEO
FRC/2013/ICAN/00000002652		FRC/2013/ClIN/00000002671
Dated: 27th July 2023		Dated: 27th July 2023

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SOVEREIGN TRUST INSURANCE PLC

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FOR THE YEAR ENDED 30 JUNE 2023

2.15 Insurance contract liabilities

2.15.1 Provision for outstanding claims and incurred but not reported (IBNR) claims Provision for liabilities of insurance contracts is made for outstanding claims and settlement expenses incurred at the reporting date including an estimate for the cost of claims incurred but not reported (IBNR) at that date. Included in the provision is an estimate of the internal and external costs of handling the outstanding claims.

Material salvage and other recoveries including reinsurance recoveries are presented as assets. Significant delays are experienced in the notification and settlement of certain types of general insurance claims, particularly in respect of liability business, environmental and pollution exposures, the ultimate cost of which may vary from the original assessment. Adjustments to the amounts of claims provisions established in prior years are reflected in the financial statements for the period in which the adjustments are made and disclosed separately, if material.

The liability for Incurred but not Reported (IBNR) claims is calculated at the end of the reporting period, using a range of standard actuarial claim projection techniques, based on empirical data and current assumptions that may include a margin for adverse deviation. The liability was not discounted for time value of money; and no further provision was made for equalisation or catastrophe reserves (as prohibited by IFRS 4). These liabilities are derecognised when the obligation to pay a claim is extinguished (i.e. expired, discharged or cancelled).

2.15.2 Provision for unearned premiums and unexpired risks

The provision for unearned premiums represents that part of written premiums, gross of commission payable to intermediaries that is estimated to be earned in subsequent periods. The change in the provision is recorded in the profit or loss to recognize revenue over the period of the risk.

2.15.3 Liability adequacy

At each reporting date the Company performs a liability adequacy test on its insurance liabilities less related deferred acquisition cost to ensure that the carrying value is adequate, using current estimates of future cash flows, taking into account the relevant investment return.

If that assessment shows that the carrying amount of the liabilities is inadequate, any deficiency is recognised as an expense in the profit or loss and subsequently by recognising an additional liability for claims provisions or recognising a provision for unexpired risks. The unexpired risks provision is assessed in aggregate for business classes which are managed together.

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