How four insurers pooled N130.6 billion gross premium

Despite worries about the harsh business environment, four underwriting firms were able to pool about N130.62 billion in gross written premium (GWP) out of total gross premium revenue of N630.4 billion generated by the industry in 2021, 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 increased financial capacity of the players.

The four underwriting firms are AllCO Insurance Plc, AXA Mansard Insurance Plc, Sovereign Trust Insurance Plc and Guinea Insurance Plc.

The breakdowns of their premiums showed that AllCO Insurance Plc generated N71.6 billion, AXA Mansard Insurance (N44.97 billion), Sovereign Trust Insurance Plc (N12.7 billion) and Guinea Insurance (N1.35 billion).

Speaking on the performance, the Managing Director and Chief Executive Officer, AIICO insurance, Babatunde Fajemirokun, said: “Our half-year results are a testament to the resilience of our business model”.

The firm’s N71.6 billion GWP in 2021 was 15.6 per cent up compared with N61.9 billion recorded in 2020.
According to the chief executive, creating products that customers need to navigate uncertainty and trust is key to the company’s improved performance.

“Every insurance policy we sell is a contract with customers and a promise that we take very seriously. For us at AIICO Insurance, all our efforts are geared towards ensuring that our customers can believe us when we say that we are here for the long haul, come rain or shine,” said Fajemirokun.

The Chief Financial Officer, AXA Mansard Insurance, Ngozi Ola-Israel, said: “We delivered double-digit revenue growth of 21 per cent year-on-year (YoY), which was N45.1billion up from N37.2 billion and 31 per cent YoY net premium income growth from 17.4b to 22.7b in the first half of the year despite tough macro-economic conditions.”

Particularly in the second quarter of the year. Ola-Israel stressed that the firm remained strongly focused on the disciplined execution of our portfolio growth ambitions by delivering 8%, 68% and 21% growth in our P&C, Life and Health businesses respectively.

To this end, Ola-Israel noted that the performance further reinforces the firm’s resilience and capacity to produce sustainable results.

She said the decline of 59% and 62% respectively in the PBT and PAT is largely driven by higher claims experienced in our health portfolio.

We are strengthening all our underwriting and claims management processes while continuing to excel in our investment performance where we grew 94% YoY.

In his part, the Managing Director and Chief Executive Officer of Sovereign Trust Insurance, Olaotan Soyinka, who spoke on the financial status of the firm last year at the weekend, said the development is indeed commendable considering the myriad of challenges that the insurance industry had to deal with in the past year of 2021.

According to him, the GPW in 2021 stood at N12.7 billion compared to the N11.1 billion written in 2020, representing an increase of 14%. Another interesting highlight of the 2021 accounts which could be described as heart-warming is the rise in the Company’s Total Assets from N14.8b to N16.3b in 2021 representing an 11% increase.

He said the insurer has resolved to meet and surpass the expectations and aspirations of its shareholders and stakeholders alike.

Also, the firm’s Deputy General Manager, Head, Corporate Communications and Investor Relations explained the issue of claims payment, and said in 2021, a total of N3.7b was paid as claims against N2.9b that was paid in 2020. This in a way underscores the Company’s claims-paying ability coupled with the company’s renewed attention to delighting its customers. The net premium income also grew by 11% from N6.5b to N7.2b in 2021.

In addition, Guinea Insurance’s Managing Director, and Chief Executive Officer, Ademola Abidogun, in his remark, urged the company’s shareholders to see the positive aspects of the upcoming changes. “With the injection of additional capital,” he asserted, “company is now well positioned to attract and transact larger portions of new businesses.”

Abiodun who also commented in the financial performance of the firm said the increase in GPW was N1.35billion, representing a 24.8% increase over the N1.08billion recorded in 2020. Gross Premium Income rose from N1.05billion to N1.34billion in 2021 representing a 27.4% increase. The Net Claims Expenses in 2021 was N0.48billion which is a 69.1% improvement over the sum of N1.55billion recorded in 2020. This was due to efficient claims management.

According to him, the organisation did record a Loss Before Tax of N60 million. This is as against N225 million recorded in the year 2020 representing over a 73.3% decrease. Loss after Tax also stood at N23 million, representing a significant drop of 89.9% decrease when compared with the sum of N228 million recorded in 2020.

Speaking recently at the industry forum, Chairman of NIA, Ganiu Musa, hinted that the industry has so far paid over N11 billion claims to all the insured that suffered losses from the Endsars riots in 2020.

Musa noted that the industry claims payment on Endsars might get to the tune of N20 billion.

According to a report released by NIA recently, insurance companies settled claims on 718 cases of vandalisation; 93 cases of looting; 113 cases of theft; and 136 cases of loss of cash. Also, 99 claims were settled on malicious damage; eight on business interruptions; 455 on burglary attacks; and 912 on fire and burnt sites.

One of the policyholders of the operators Mrs Funmilayo Ebijumi, who spoke to The Guardian after the yearly general meeting of the above operators, said to attract more investors in the insurance industry, and regain shareholders’ confidence to achieving more revenue drive, there is need for underwriting firms to take the issue of claim payment as a priority. For this, more Nigerians will embrace insurance policies and the industry penetration will definitely improve.