Sunday, 4th June 2023

Four underwriters pool N42.939 billion written premium in 2019

By Bankole Orimisan
13 July 2020   |   4:00 am
Despite Nigeria’s challenging operating environment, four insurance companies were able to pool about N42.939 billion Gross Written Premium (GWP) for insured risks, The Guardian has gathered.

Despite Nigeria’s challenging operating environment, four insurance companies were able to pool about N42.939 billion Gross Written Premium (GWP) for insured risks, The Guardian has gathered.

The operators attributed the performance to growth across all lines of business in the market, even as stakeholders believe that one of the ways to drive industry penetration is through the underwriters’ financial strength.

The four insurers had recently done a virtual 2019 Annual General Meeting (AGM), and they include; Sovereign Trust Insurance Plc, FBN General Insurance, Mutual Benefits Assurance Plc, and Prestige Assurance Plc.

Speaking on the performance, the Managing Director/Chief Executive Officer, Sovereign Trust Insurance, Olaotan Soyinka, told The Guardian that the growth is encouraging and will continue to remain so, going forward.

Sovereign Trust recorded 51.5 per cent growth in its Profit Before Tax, totalling N819 million against N540 million recorded in 2018.

Also, Gross Premium Written in 2019 stood at N10.8 billion compared to the N10.5 billion written in 2018, representing a 3.43 per cent increase.

Commenting on the kind of results that would attract more policy intake to the industry and future outlook, the Chairman, FBN General Insurance, Gbenga Shobo, told The Guardian, that the 2019 financial results showed that Gross Premium Written grew by 58 per cent from N4.63 billion in 2018 to N7.31 billion.

“We also recorded a 19 per cent increase in Profit Before Tax (PBT) of N733 million compared to N615 billion recorded in 2018.”

Similarly, the Managing Director/Chief Executive Officer, Bode Opadokun, noted that the sector witnessed an impressive growth along key metrics and across major lines during the financial year.

Further analysis of FBN General Insurance showed 17 per cent growth in total assets in 2019, translating to N11 billion above the N9.4 billion recorded in 2018. The company also ensured prompt claims payment to its customers during the year to the tune of N2.3 billion.

Mutual Benefits Assurance Plc, reported profit after income tax of N3.61 billion in 2019, a 214 per cent increase over the N1.15 billion recorded in 2018.

Its audited account released on the floor of the Nigerian Stock Exchange (NSE), showed gross premium written rose by 18% from N15.84 billion in 2018 to N18.7 billion in 2019. Net premium income stood at N15.29 billion, a 13 per cent increase over the N13.48 billion in 2018.

The Managing Director, Mutual Benefits, Femi Asenuga, confirmed that the life segment paid combined claims amounting to N21 billion in 2019, while the general business paid N3.2 billion, while Life Business paid N17.8 billion.

A breakdown of the claims paid by Mutual Benefits indicated that Maturity Claims accounted for the highest at N8.00 billion, followed by Surrender Claims at N4.28 billion, and Group Life Claims at N4.03 billion. Partial withdrawal stood at N1.26 billion with Credit Life, Individual Death Claims, and Annuity Claims accounted for N75.59 million, N105 million and N45.62 million, respectively. These however represent a 12.1% decrease from the total claims of N20.25 paid last year.

For the Non-Life Business, Gross Claims paid was N3.2 billion. Motor Claims being the highest was N1.22 billion, followed by Fire Claims at N859 million. Special Risks (Aviation/Oil & Gas) attracted N472.12 million Claims, and Marine Claims were N180.144 million.

Also speaking with The Guardian, the Chairman of Prestige Assurance Plc, Adedoyin Salami, said the Company as at December 31, 2019, grew gross premium written to N6.129 billion from N4.792 billion in 2018, indicating a 27.88 per cent increase.

From the revenue, the company recorded a 1.9 per cent increase in profit for the year, moving from N423.795 million in 2018 to N431.83 million in 2019.

Salami said the modest improvement in profitability compared to the previous year was the result of the combined effects of increased claims expenses, and reduction in investment income, as interest rates dropped during 2019.

Total Assets also grew by a marginal 1.2 per cent from N13.021 billion in 2018 to N13.18 billion in 2019.

Looking ahead, he said the company’s objective is to continue to demonstrate efficiency and credibility to clients by extending services of the utmost quality to them, advising on prudent underwriting in relation to the insurance requirements of the client, and making prompt settlement of genuine and verifiable claims.

“We will also assert ourselves into the critical role of being comprehensive risk managers and advisors as underwriters should aspire to be, and whatever the conditions of the evolving business environment, our objective remains unchanged, and our commitment to it, unwavering,” Salami stated.

He said the Company had issued a bonus of two new shares for every 11 shares previously held during the 2019 business year, to help with the process of recapitalizing Prestige Assurance.

According to him, with the extension in the recapitalisation timetable by the National Insurance Commission (NAICOM), “we must attain N5 billion by the end of this year, and complete the recapitalization by the 2021 deadline. Your Board and Management will continue to work towards ensuring we complete the process well before the deadlines.”

Salami however appealed to shareholders to participate fully in the forthcoming Rights Issue, which will open soon, to ensure the complete recapitalization of Prestige Assurance ahead of schedule.

One of the policyholders’, Mrs Juliet Akudo, spoke on some of the challenges faced by few insurance operators who haven’t released their 2019 financial results, noted that they must have taken wrong investment decisions.

Akudo added that such wrong decisions would now result in denying the payment of claims to policyholders as and when due, adding that the only way to succeed in the long term is to remain committed to the full execution of strategic objectives of becoming a best-in-class lifestyle company, and delivering superior value to industry’s shareholders.