Q1: Insurance firms record N31.85bn GWP

By Chinwendu Obienyi and Chiamaka Ajeamo

Against all odds and the harsh business atmosphere, especially, with the COVID-19 pandemic and the #EndSARS riot which negatively impacted the balance sheet of insurance businesses in 2020, five quoted insurance companies recorded a rise of N31.5 billion in their respective Gross Written Premiums (GWP) for the first quarter (Q1) of 2021.

It is worthy to note that the Nigerian insurance industry paid N4 billion as claims to over 2000 businesses and individuals that suffered loss during the #EndSARS protests which rocked the country in October last year.

To this end, analysis done by Daily Sun revealed that insurance firms which include; AIICO Insurance Plc, Consolidated Hallmark Insurance Plc, Guinea Insurance Plc, Prestige Assurance Plc and Sovereign Trust Insurance Plc recorded an increase in their gross written premium for the period ended March 31, 2021.

According to the first quarter (Q1) 2021 results released on the NGX’s website, AIICO Insurance Plc earned an underwriting profit of N27.7 billion for the first quarter of 2021 as against N131.0 million recorded for the first quarter of 2020.

The firm’s GWP grew by 12.2 per cent y-o-y to N19.7 billion for the period under review from N17.6 billion recorded for the same period in 2020. The company’s profit before tax (PBT) increased by 11. 3 per cent year-on-year (y-o-y) to N1.6 billion from N1.4 billion posted for the same period in 2020. However, the PAT declined by 17.6 per cent y-o-y to N1.5 billion for the period under review from N1.9 billion recorded in 2020.

However, the underwriter recorded a loss of N24.1 billion in total investment income from N4.7 billion recorded in 2020 with the insurer explaining that the Federal Government bonds made up most of its investment portfolio thus; as bond yields rose, it affected the fair value of the company’s financial assets.

Consolidated Hallmark Insurance (CHI) Plc, on its part, recorded 39.11 per cent boost in its profit after tax (PAT) to N291.4 million in 2021 from N209.5 million recorded in the corresponding period of 2020, while the PBT stood at N449.4 million for the period under review from N346.2 million recorded in 2020.

The company’s GWP saw an increase of N3.5 billion in 2021 from N3.1 billion recorded for the same period in 2020, even as the underwriting profit rose to N918.2 million from N788.8 million posted in 2020.

For Guinea Insurance Plc, despite a GWP growth of 66.8 per cent to N345.4 million from N207.0 million posted in 2020, witnessed a loss after tax of N61.2 million from N23.8 million recorded in the previous year under the same period.

 Prestige Assurance Plc, recorded a 22.1 per cent profit to the sum of N710.6 million from N581.6 million in 2020 while its PBT stood at N888.2 million in 2021 from N796.7 million in 2020.

The firm’s GWP grew by 41.15 per cent to N3.0 billion from N2.1 billion recorded under the same period in 2020.

On the other hand, Sovereign Trust Insurance Plc’s GWP grew to N5.3 billion in Q1 2021 from N3.6 billion recorded under the same period in 2020.

This is just as the insurer’s net premium income rose by 18 per cent to N1.9 billion for the period under review from N1.6 billion posted in 2020.

The company’s PBT recorded a significant leap from N306 million in the first quarter of 2020 to N510 million in the corresponding period of 2021, while the PAT grew by 43 per cent to N392 million for the period under review from N274 million in 2020.

Commenting on these results, the Chief Executive Officer, AIICO, Babatunde Fajemirokun, said, that at the moment, global economies are in a difficult moment and Nigeria has not been spared.

Babatunde further added that even as the world starts to move on from the pandemic, the economic after-effects will reverberate for a while yet while noting that there is some reason for optimism since economic activities have improved with the country likely exit the recession.

He said, “Oil prices remain elevated, and the pandemic-induced lockdowns are easing all over the world. We made significant strides in 2020: implementing our business continuity plan and leveraging technology to improve processes and get closer to our customers. Building on this, we recorded a premium growth of 12.2 per cent y-o-y to N19.7 billion in Q1 2021. Our financial position remains resilient as well – shareholders’ funds increased 3.3 per cent year-to-date to N34.8 billion.

“Nonetheless, we remain optimistic that economic activities will continue to rebound in coming periods, the IMF has revised its economic growth forecasts for Nigeria upward to 2.5 per cent from 1.5 per cent.

“Insurance, like every other sector will have its role to play in the economic recovery as enablers of economic growth by assuming risks that encourage long-term direct investment which enhances production and job creation. Our robust financial position ensures that we can meet our obligations when they arise.”

The Managing Director/Chief Executive Officer of CHI, Eddie Efekoha, speaking on its 2020 financial result which was released recently, noted that against all the challenges which the year 2020 brought, the firm is glad to have delivered an impressive result.

“We are also better prepared to meet the challenges of the future as we see more Nigerians begin to accept insurance as a prudent means of protecting themselves against existing and emerging risks.”

Efekoha added that the company “is encouraged by the trust and loyalty of our numerous customers and insurance brokers, and therefore continue to develop our operating and technology capabilities to ensure that we meet and exceed their expectation.”

On his part, speaking on its full-year (FY 2020) results, the Chief Executive Officer, Sovereign Trust Insurance Plc, Olaotan Soyinka, said the development is an encouraging one considering the level of work that was put in place.

Olaotan noted that the management of the company is committed to meeting and surpassing the expectations and aspirations of its shareholders and stakeholders alike.

“These performance levels are a confirmation of the management’s determination to effectively and strategically position the company as one of the leading firms in the country’s insurance business, while at the same time, propel to a profitable height for shareholders’ delight” in the years ahead”, he said.

Also, industry analysts who commented on the performance of the companies said that they are happy that operators were able to record such performance despite knowing that the insurance industry was one of the most hit by the pandemic.