Gold link Insurance Plc released its 2016 Q3 results showing pre-tax loss was N1 billion for the period compared to a pre-tax profit of N126.6 million same period last year. The company reported Underwriting loss of N207.8 million compared to an Underwriting profit of about N1 billion a year earlier.
A look at the company’s results reveal the losses was as a result of lower Net premium income and higher claims and underwriting expenses. Insurance company’s in Nigeria have been directed by Naicom to report their financial statements on a no premium no cover basis meaning that they can no longer book revenues for insurance business that is not backed with cash.
A further look at the result however reveals that the company is technically insolvent as it has a negative equity of about N4.7 billion and a cash balance of just N25 million. The company also has negative reserve of about N11.9 billion. Based on this balance sheet analysts wonder why the company is still allowed to provide insurance cover for anyone. The company also operates in both the Life and General Insurance Business, two areas that affect ordinary Nigerians.
Goldlink Insurance Plc was incorporated on 15th April, 1992 as a Private Limited Liability Company and granted licence to operate as a full-fledged insurance company on 8th September, 1993. Goldlink was incorporated with an authorised share capital of N10million with fully paid-up capital of N10million. In readiness for listing on the Nigerian Stock Exchange (NSE), Goldlink converted to a Public Liability Company on 11th May, 2007 and was listed on the NSE by way of introduction on 12th February, 2008. It was incorporated with the share capital of N4.5bn.
The company nor Naicom did not issue any press release explaining what it planned to avoid going bust.