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NEM Insurance posts 23% increase in net premium in 2021

By Helen Oji
29 May 2022   |   2:57 am
For the 2021 financial year, NEM Insurance Plc has posted a net premium of N19.3 billion, against N15.8 billion recorded in the corresponding period of 2020.

Tope Smart

For the 2021 financial year, NEM Insurance Plc has posted a net premium of N19.3 billion, against N15.8 billion recorded in the corresponding period of 2020.

The insurance firm also generated a gross premium of N27.8 billion up from N22 billion achieved in 2020.

The Chairman of the company, Dr Fidelis Ayebae while addressing shareholders during the company’s yearly general meeting held in Lagos recently said the percentage increase in net premium is 23 per cent while gross premium grew by 26 per cent.

Ayebae said the underwriter during the period under review posted net premium of N19.3 billion from N15.8 billion recorded in the corresponding period of 2020, an increase of 23 per cent.

He said the insurance firm incurred a gross claim of N11.6 billion during the review period as against N8.4 billion in 2020, an increase of 26 per cent.

In the same vein, the net claims expenses of N5.6 billion incurred in 2021 was nine per cent lower than that of the preceding period which was N6.05 billion.

“The net claims ratio for the period under review was 20 per cent as against 27 per cent in 2020 due to good claims recovery during the period under review,” he said.

According to him, though interest rate in commercial paper was low in 2021, the insurer was proactive enough to take the advantage of other investment opportunities to generate income on investment of N1.13 billion.

The chairman said this resulted in an increase of about 13 per cent as against the previous income on investment in 2020, which was N1.004 billion.

Ayebae hinted that investment in Associate (RegencyNem Insurance Ltd., Ghana) was fully impaired in 2021 because of going concern issues, adding that the Group incurred the sum of N4.18 billion being an adverse variance of 30 per cent over year 2020, which was N3.22 billion.

The chairman said that the parent company recorded a negative variance of 29.5 per cent over year 2020.

“Specifically, N4.16 billion was incurred in 2021, N3.19 billion was incurred in 2020,” he said.

Ayebae said that the group’s Earnings Per Share (EPS) for the year under review stood at 89k in contrast with 96k in 2020.

According to him,  the group’s Profit After Tax (PAT) stood at N4.45 billion in 2021 lower than N5.08 billion in the previous year, representing a decrease of 12.5 per cent.

He stated that the board of directors had recommended a dividend of 22k per ordinary shares to be paid out of the profit for the year.

On recapitalisation, Ayebae noted that in spite of the suspension of the process by the National Insurance Commission (NAICOM), NEM Insurance was poised to recapitalise and had enough reserve to do so.

The chairman identified the rising inflation, insecurity, climate change, Russia/ Ukraine war, hike in fuel pump price, unstable labour market and new waves of COVID-19, among others as part of challenges in the present year.

Ayebae expressed optimism that the company would record enhanced performance in the current.

He said: “As the situation continues to be very dynamic, the company has been working diligently to assess the potential risks posed by COVID-19 to its business on an ongoing basis and to realign its strategies accordingly. We are of the opinion that our business operations will not suffer any major setback on account of these major challenges.”

The board and management will continue to leverage its robust technology infrastructure and maintain a healthy result and asset base,” he said.

In his address, the Group Managing Director/Chief Executive Officer, NEM Insurance,  Tope Smart, said that the company recorded positive performance in the review period.

Smart explained that the global health crisis in year 2020, which further compounded the fragile economic situation in Nigeria, took its toll on households and corporate bodies.

He said: “Despite this difficult terrain, our company showed resilience and we were able to post impressive results. To our board members, words are not enough to express our appreciation to you for creating the right environment, which assisted us in delivering value to all stakeholders, we are grateful.

“I want to equally thank all our staff who in the midst of difficulty, brought about by COVID-19 remained undaunted and have continued to deliver superior services to our numerous brokers and clients. To all our shareholders, thank you for keeping faith with us in this journey.”