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•Pays N1bn claims in H1 2023, targets N10bn premium income
By Henry Uche, [email protected]
Mr. Benedict Ujoatuonu is the Managing Director of Universal Insurance Plc. At a press brief in Lagos, he enumerated how his company was able to soar in the midst of socio-economic and political turbulences overwhelming the country.
As technical and management professional among others, he spoke on the company’s prospect and other salient issues in insurance business.
Excerpt.
What we met at inception
We met a negative retained earnings of over N3.8billion, but we have changed the narrative today. We have a negative retained earning of about N600 million, we’re very hopeful that we are going to wipe off the remaining negative retained earning into and declare dividends for our shareholders. Our eyes are on the ball, we’re pushing for it and we are committed to achieving it.
Coping with excruciating business environment in the last five years?
The truth is that, when the birds choose to fly without perching, the hunter shoots sporadically. But you see, we invested heavily in retail line of business. Despite all odds, our retail line of business is growing very well. And that was what informed our network marketing we created. It was designed in a way and manner that as a customer, when you introduce someone to the business, you earn income therefrom. So the customer is not just buying just the cover, he/she is also make money from buying the cover.
Plans to gain more market share
Expansion strategy. We have expanded to Apapa, Lekki, Maiduguri, Kano and Yenegoa in Bayelsa. We’re still identifying more areas to have strategic presence as part of our growth strategy. Already we have heavy presence in the South Eastern States.
In product development, we have some new products. We have robust retail line of business and products. This month, we’re flagging off two new products- what we call ‘Universal Insurance Network Marketing,’ designed to not only sell our products but to create income for people through network marketing and also our ‘digital App’ which is already in the Play Store through which people can access our products.
We are not resting on our oars. There are a whole lot we are still developing which shall be rolled out for the market when we get approval from NAICOM.
Having strongly positioned yourself in the south East, where is your next focus?
Yes, we have presence in all the South Eastern states. Some of them we have two branches like Abia and Anambra and a regional hub. The purpose is to have a strong grip of our origin. We’re collaborating with the South East Chamber of Commerce to see how we may penetrate all the industries in the South East. We working towards that. We sponsored the last Enugu Trade Fair. These and more are part of our strategies in entrenching ourselves in the region. And we are not relenting in doing that. We are seeing the businesses coming notwithstanding the challenges they’re facing. Now the northern region of Nigeria is our next focus. We’re going to have more branches in the north.
Why we went to Maiduguri, others amid insecurity
The government is spending money to rebuild destroyed structures destroyed by terrorists. NGOs are there in support of rehabilitation work going on in those terrorised region. So there’s need for us to come in too. The purpose is clear. And it’s paying off.
Penetration strategy
We go to schools, at NYSC camps we talk about our business to young people. We don’t expect to get patronage from them in terms of naira and Kobe, but we just want them to be aware of insurance business. Because we have observed that most of them, no matter their discipline have no idea about insurance business. One of the greatest things we have achieved is positive projection and acceptability in the market. I must tell you this has added so much to us.
Your unique skills?
I have technical background. Part of the things we did from inception was to study the market. We looked as if we were media shy, but I said, let’s get our house in order first so that if you push out and people come in and you have issues, you won’t have stories to tell. We arranged a very robust and well structured reinsurance program as I said earlier. We are still pursuing our reinsurance for the recovery of the claims we paid, it was suppose to be cash cut, the only thing I suffered was cash outlay because I have a very well structured reinsurance program. Out of the N479 million, our net net outlay on that was less than N100 million because we structured reinsurance program very well. I’m a technical person, I structure my business and I understand the trajectory of the business- I know what to do. So, that helps us to build capacity. We don’t play with our reinsurance. Our reinsurance brokers have confirmed that we are the only company that do not waste time in paying our reinsurance premiums. We don’t play with it. It’s very risky to toy with. More so, we have built retention over the years where we can easily fall back to, as we project our growth.
We’re driving growth in the retail space with pocket-friendly top-on-the-line products, designed to include and satisfy low-income earners as well as artisans in various fields of endeavours. Poised to be a giant in risk-bearing, we’re fully computerized to drive excellence in service delivery, prompt claim settlements, and customer-centricity.
Implementing IFRS 17
We have converted the first quarter using the IFRS 17 format. Though NAICOM permitted we use consultants, but for knowledge transfer sake, we’re not using consultants all through, our in-house hands would handle certain functions. We have concluded arrangements with Deloitte to access their software in this regard. In converting our first quarter, after the conversion, we were able to make profit in excess of N200 million under the IFRS 17.
Your financial position
Let’s start from 2021, after coming out of Covid- 19, we made a Premium Income of N3.6bn. In 2022, we did N5.6bn, giving us a 58% growth, while our profit after tax (PAT) in 2022 was N618 million. Then total claims paid in the same year under review was N1.158bn.
In Q1 2023, we made N3.7bn Premium Income and a Profit of N825 million, while total claims paid for H1 2023 is approximately N1bn. A major claim we paid recently was in May of about N479 million.
Q2 2023, we made a Premium Income of N5.1bn. We are targeting N10bn Premium Income at the end of 2023 financial year. Having exceeded 50% of this target in the first half of 2023, we are very optimistic to meet this target of N10bn.
For 2024, assuredly, we are looking at making N18bn Premium Income. We’re optimistic to pay dividend to shareholders at the close of business this year. The company’s shareholders fund stands at over N19.8bn with an asset base of about N12.4bn and N16bn fully paid shares and issued share capital of N8bn.
How did the reviewed third Party Motor insurance rate pegged at N15,000 affect your market share?
Actually it affected our income. This was because we insisted we were not going to cut corners. We must sell at the approved rate. If we could do that, and other insurers do same, it would help us in the long run in growing our income. We are very hopeful we shall bounce back in terms of revenue therefrom.
Any plan to increase your agency?
Currently, our agent network is over 200 across the federation. We have partnership with embedded insurance system. We partners with the likes of Right Choice Distribution Company. You know people naturally would not buy insurance, so we are partnering to see how we can package it. All our retail line of operations are fully digitalised. We are also partnering with Polaris bank, among others.
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