Niger Insurance Plc released its 2015 Full Year results revealing an earnings per share of 7.76 kobo per share compared to 8.93 kobo same period last year. Underwriting profits for the period was N3.1 billion compared to N3 billion a year earlier. Profit after tax was N601 million compared to N690 million same period in 2014.
However, an aspect of the results that caught our attention was a an “emphasis of matter” clause made by the Auditors SIAO Chartered Accountants.
“We draw your attention to the Risk and Capital Management framework on page 47 of the financial statements. The group‟s qualifying assets cover in its life business segment, based on the regulators measurement of admissible assets discloses a shortfall of N 4.089 billion.”
The clause basically highlights the fact that the value of qualified investments owned by Nigeria Insurance is a whopping N4 billion short of the amount required to cover for the life insurance policies it currently has. This in our view will require that the company raises capital urgently or convert some of its assets into qualifying assets.
The company also admitted this much in its annual report page 47;
However, the group‟s qualifying assets cover in its life business segment based on the regulators measurement of admissible assets discloses a shortfall of N 4.089 billion. This is as a result of its huge investment in real estate over the years. The matter is being addressed through restructuring of statement of financial position and injection of fresh capital.
More to follow…