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See the “score card” as insurance firms hurriedly release H1 2019 results

As July was drawing to a close, many listed companies on the NSE were in a rush to file their H1 2019 unaudited financial statements. Among them were about eighteen insurance firms.

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Insurance Firms

As July was drawing to a close, many listed companies on the Nigerian Stock Exchange were in a rush to file their half-year 2019 unaudited financial statements. Among them were insurance firms, nearly twenty of whom disclosed their financial performances for the past two quarters of the year.

Just in case you are wondering why this is a big deal, quoted insurance companies in Nigeria are “notorious” for late filing of their financial statements. For this very reason, many of them have constantly been fined.

[READ: NSE to sanction Fidelity Bank, others for late filing of reports]

 Earlier this year, some insurance firms blamed the IFRS (i.e., the International Financial Reporting Standard 6 & 4) for the delay in the filing of their full-year 2018 results. According to the insurance firms, more time was needed in order to enable them successfully implement the IFRS which was recently mandated by the National Insurance Commission, NAICOM. To this end, therefore, they sought for an extension of the time required of them to file their results, a request that was obliged by the NSE.

Going by their timely compliance this time around, it is safe to assume that the insurance companies have finally gotten used to the new reporting standard. But how well did they perform financially in H1 2019? This is the one million question because it is one thing for a company to hurriedly release its financial statements, and another thing for the said financial statements to be impressive. This is why we have compiled and analysed the results and shall hereby compare them.

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The Score Card: Out of about twenty-three insurance companies that are listed on the Nigerian Stock Exchange, eighteen released their H1 2019 results while five cited a number of excuses for their delay. The sum of N102.1 billion was earned in gross premium by these companies.

The top five performers: In terms of profit, the top five best-performing Nigerian insurance companies in H1 2019 are:

  • AIICO Insurance Plc
  • NEM Insurance Plc
  • Mutual Benefits Assurance Plc
  • AXA Mansard Plc
  • Africa Prudential Plc

The worst performers: So far, the worst performing insurance companies (in terms of half-year 2019 profit/loss), in no particular order, are:

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  1. African Alliance Insurance Plc and
  2. SUNU Assurance Nigeria Plc

The Breakdown

AIICO Insurance Plc earned a gross premium of N23.3 billion to emerge the highest-earning. The company’s profit before tax for the period stood at N3.1 billion while the profit after tax stood at N2.9. The insurance company was incorporated on July 14th 1970 and has a market capitalisation of N4.4 billion on the Nigerian bourse.

AIICO Insurance Plc

AIICO Insurance’s CEO, Edwin Egbiti, and other company officials during an AGM

NEM Insurance Plc earned a gross premium of N10.6 billion to come second on this list. Its profit before tax for the period under consideration stood at N1.9 billion, even as profit after tax stood at N1.6 billion. The company has been listed on the NSE since September 1990 following its incorporation in April 1970. It has a market capitalisation of N11.3 billion.

Mutual Benefits Assurance Plc came in third, having earned a gross premium of N8.2 billion in H1 2019. The company’s profit before tax for the period is N1.8 billion, even as profit after tax stood at N1.4 billion. The company has a market capitalisation of N2.4 billion.

[READ: NAICOM urged to extend deadline for recapitalisation of Insurance firms]

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AXA Mansard Insurance Plc recorded a gross premium income of N19.6 billion. However, difference operating costs (including reinsurance expenses valued at N7.5 billion) saw it recording a profit before tax of N1.5 billion and a profit after tax of N1.4 billion. Mansard remains highly-capitalised at N17.3 billion.

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Africa Prudential Plc: This company’s gross premium earned in H1 2019 is N2 billion. Profit before tax is N1.2 billion while profit after tax is N1 billion.

It should be noted that African Alliance Insurance Plc’s gross premium income stood at N2.9 billion. The company only ceded N23.4 million worth of insurance premium to reinsurance. It then recorded a loss before tax of N2.1 billion and a loss after tax of N2.3 billion.

In the same vein, SUNU Assurance Nigeria Plc earned a gross premium of N1.4 billion and incurred reinsurance expenses of N314.7 million. Loss before tax stood at N146.2 million while loss after tax stood at N174.4 million.

[READ: Is this company quietly planning its exit from the NSE?]

The Other Details

Continental Reinsurance Plc recorded an insurance premium revenue of N19.7 billion. Its profit before tax stood at N1.1 billion even as profit after tax stood at N864.3 million.

Cornerstone Insurance Plc’s gross premium income for the period under review stood at N6 billion. Profit before tax stood at N557.5 million, while profit after tax stood at N501.7 million.

LASACO Assurance Plc recorded gross premium earned of N5.4 billion, profit before tax of N639.9 million, and a profit after tax of N479.4 million.

For Consolidated Hallmark Insurance Plc, the gross premium earned stood at N4.4 billion, profit before tax at N426.5 million, and profit after tax at N332.3 million.

Regency Alliance Insurance Plc recorded a gross premium income of N2.1 billion, profit before tax of N396 million, and a profit after tax of N317.2 million.

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WAPIC Insurance Plc earned a gross premium of N3.8 billion, with profit before tax standing at N299.4 million, just as profit after tax stood at N 185.4 million.

Linkage Assurance Plc’s H1 gross premium income stood at N1.5 billion. Profit before tax is N190.7 million, even as profit after tax is N133.5 million.

 Law Union and Rock Insurance Plc recorded gross premium earned of N2.3 billion, profit after tax of N120.8 million and a profit after tax of N102.7 million.

Lastly, Veritas Kapital Assurance Plc earned a gross premium of N1.4 billion with a profit before tax of N162.5 million and a profit after tax of N60.9 million.

Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs. He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor. Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan. If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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Coronavirus

ECOWAS COVID-19: Nigeria drops to 7th position in recovery rate

According to data from ECOWAS Centre for Surveillance and Disease Control, Nigeria has dropped to 7th position in recovery rate.

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The ECOWAS COVID-19 daily update report, as of November 22nd, 2020, shows that Nigeria is ranked 7th on recovery rate (93.5%), 10th on death rate (CFR – case fatality ratio) at 1.76%, and 9th on active cases (4.7%) amongst the 15 member countries of the ECOWAS (Economic Community of West African States).

This data can be seen on the Twitter handle of the ECOWAS Centre for Surveillance and Disease Control.

A week ago, as of 15th November 2020, Nigeria occupied the 6th position in recovery rate (93.7%), 9th position in CFR (1.79%) and 11th position in active cases (4.5%).

According to the report, there are 209,614 confirmed cases, 2,842 deaths, 189,917 recoveries, and 8,849 active cases in ECOWAS countries. This data represents in Africa, 9.8% of the confirmed cases, 5.7% deaths, 10.9% recovery rate and 3.3% active cases.

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As regards the death rate (CFR), Liberia tops the list with 5.29%, followed by Niger 5.12% and Mali 3.41% while Guinea is the least with 0.58%.

On recovery rate, Cote D”Ivoire tops the list with 98.3%, followed by Senegal 97.5% and Ghana 97.1%, with the least coming from Mali with 71.1%.

Mali has more active COVID 19 cases with 25.5%, followed by Sierra Leone 20.9% and Togo 20.9% and with Senegal contributing the least with 0.4%.

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What you should know

  • As at November 22 2020, worldwide, there are 58,649,324 confirmed cases, 1,388,068 deaths and CFR of 2.3%
  • In Africa, there are 2,057,029 confirmed cases, 49,412 deaths and CFR of 2.4%
  • In West Africa, there are 201,614 confirmed cases, 2,842 deaths and CFR of 1.41%, with a recovery rate of 94.2%.

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Companies

Naira devaluation, FX scarcity caused increase in cost of goods – Nigerian Breweries

Nigerian Breweries has revealed that Naira devaluation, FX scarcity caused increase in the cost of its goods in 2020.

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Jordi Borrut Bel, Nigerian Breweries Plc

The Finance Director of Nigerian Breweries Plc, Rob Kleinjan, has revealed that the increase in the brewer’s costs of goods was due to the devaluation in naira and FX scarcity, which led to the increase in the cost of inputs such as sorghum and sugar, as they are not fully produced locally.

This disclosure was made during the Nigerian Breweries’ Fact Behind Figures results presentation today.

However, Kleinjan explained that the increase in cost could not be fully attributed to currency devaluation and foreign exchange scarcity, which exerts pressure on imported input materials.

He said the increase in Nigerian Breweries’ costs of goods sold, as reported in its unaudited financial results, could also be linked to the volume of goods sold, as the company’s sales volume in Q3 increased by almost the same percentage as the cost of goods sold.

However, Mr. Kleinijan reiterated that to mitigate further losses, it was important for the company to focus on the supply chain and seek ways to mitigate price increases.

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What they are saying

The Managing Director of Nigerian Breweries, Mr. Jordi Borrut, while speaking at the virtual event said:

In 2020, the results of Nigerian Breweries were adversely impacted by COVID, VAT increase, FX devaluation and scarcity of foreign exchange. The year started with a promising 1st quarter, which was heavily impacted in Q2. The Nigerian market, however, rebounded in Q3.”

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Mr. Rob Kleinjan, while explaining the factors behind the increase in Nigerian Breweries’ cost of goods sold in the first nine months of 2020, said:

It is also clear that the increase in cost is due to the devaluation and the FX scarcity which has put pressure on our input cost. If you look into the main elements we use, which are sorghum and sugar – they are not fully produced locally, so when the currency is devalued, the prices of these inputs will soar.

That’s why it’s important that we are focused on the supply chain, and seek for ways we can mitigate any of the price increases, because the increase in cost comes from the input prices, which come from FX scarcity.”

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ENDSARS

FG petitions CNN over investigative report on Lekki shooting, threatens action

The Federal Government has petitioned CNN over its alleged bias report on the Lekki Tollgate shooting.

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The Federal Government has written a petition to the US-based Cable News Network (CNN), demanding an immediate and exhaustive investigation into its report on the Lekki Tollgate shooting, to determine its authenticity and conformity to basic standards of journalism.

The government berated CNN for its investigative report on the #EndSARS protest in Lekki area of Lagos, pointing out that the media outfit breached the most basic of the core principles of journalism – balance and fairness.

In the petition written by the Minister for Information and Culture, Lai Mohammed, to Jonathan Hawkins, VP (Communications) in CNN Centre Atlanta, Georgia; the government said that if the international media organization does not carry out its demand, it will take any action within its laws to prevent CNN from making the #EndSARS crisis worse.

According to a report from Punch, the government’s letter dated November 23, 2020, is titled “Re: How a bloody night of bullets quashed a young protest movement”.

The letter reads: “Our attention has been drawn to an ‘investigation’ by CNN, entitled ‘How a Bloody Night of Bullets Quashed a Young Protest Movement’ and aired on 18 Nov. 2020, in which the international news organization said it uncovered that Nigerian security forces opened fire on unarmed protesters at the Lekki Toll Gate in Lagos, Nigeria, during the #EndSARS protest.”

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“We write to put on record that the report did not just fall short of journalistic standards, it reinforces the disinformation that is going around on the issue. It is blatantly irresponsible and it is a poor piece of journalistic work by a reputable international news organization.

“In the first instance, the report did not live up to the most basic of the core principles of journalism – balance and fairness. According to the website www.ethics.journalists.org, balance and fairness are classic buzzwords of journalism ethics: In objective journalism, stories must be balanced in the sense of attempting to present all sides of a story. Fairness means that a journalist should strive for accuracy and truth in reporting, and not slant a story that makes a reader draw the reporter’s desired conclusion.”

What you should know

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It can be recalled that CNN in its investigative report broadcasted on November 18, disclosed that the Nigerian army allegedly fired live ammunition directly at unarmed protesters, who peacefully assembled at the Lekki Tollgate during the #EndSARS protests. While confirming some deaths, CNN said it spoke with over 100 protesters and family members, but didn’t speak to any government official.

In response to the Federal Government’s criticism of the report, which it described as a blatantly irresponsible and a poor piece of journalistic work, CNN insisted that it was standing by its report.

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