NEM insurance profit hits 290.8 per cent in 2016
•As Investors nod with N0.08Kobo bonus
Africa’s top underwriter, NEM Insurance Plc has said its profit before tax (PBT) in the 2016 financial year has increased by 258.3 per cent and 290.8 per cent for the group and parent company respectively.
It added that the group PBT rose massively from N598.8million in the previous year of 2015 to N2.14billion at the end of 2016 while the Parent Company BPT rose from N559.4million In 2015 to N2.19billion in the period under review.
Speaking at the company’s 47th Annual General Meeting in Ibadan, Oyo State, the Chairman, Dr. Fidelis Ayebae, said there was a notable improvement in its claims experience during the period under review.
According to him, claims expenses incurred by the Group and Parent Company were N2.67billion during the reporting year, an improvement of 32.6 per cent and 29.7 per cent respectively.
He said: “in the previous year the absolute figures were N3.96 billion and N3.8 billion respectively. Gross Claims ratio was 37.7per cent for the Group and Parent Company, while that of the preceding year was 43.9per cent and 43.3per cent respectively. The Net Claims ratio was 31.4percent for the Group and Parent Company, down from 46.3per cent and 46.6per cent respectively a year ago.
He added that “the Financial Assets for the Group and Parent Company for the year under review improved by 8.5 per cent and 17.9percent respectively over that of the preceding year. While the Total Assets and Total Equity of the Group improved by 16.1 per cent and 19.4 per cent respectively, those of the Parent Company improved by 20.2per cent and 19.7per cent respectively.”
He explained further that “following the directive of the National Insurance Commission Ghana to increase the share base of Insurance Companies from $1million to $5million, we decided to merge our operations with Regency Alliance Ghana Ltd. The new name of the merged entity is RegencyNem Insurance Ghana Ltd. As a result of the merger, the status of NEM Insurance Ghana Ltd. has changed from being a subsidiary to an Associate, as our stake in the company is 40 per cent.
“This resulted into a decrease of 1.3 per cent in Gross Premium over the previous period for the Group. The absolute figure was N10.8billion in 2016 as against N10.9billion in 2015. On the other hand the Parent Company recorded an increase of four per cent over the previous year. The sum of N10.8billion was achieved in 2016 while in 2015 it was N10.3billion.
“The low interest rate as well as the inability of MTN to pay dividend as at when due because of the issue they had with the NCC, investment income decreased by 35.7 per cent for the Group and 29.1 per cent for the Parent Company. While the Group generated an Investment Income of N479.5million during the year under review, the Parent Company also generated N479.5million. In 2015 the income was N746.2million and N676.4million respectively.” Earnings Per Share (EPS) for the year stood at 34 kobo; an increase of 154.7per cent over that of the preceding year, which was 14 kobo.
Following its impressive performance the board of directors offered N0.08kobo dividend to its investors for the financial year ended 31, December 2016.
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