The 2017 AXCO Global Statistics database ranked the Nigerian insurance market 72nd in the world, based on industry Gross Premium Income. The gross premium income is the key indicator of growth in the Insurance sector.
The Nigerian Insurance market posted a 14.5% growth, from N372 billion in 2017 to N426 billion; and has continued to witness steady growth since 2014, when its Gross Premium Income: Non-life and Life business was N281 billion.
However, the sector continues to face several challenges, and has not fully tapped into its potentials in one of Africa’s largest economies. The reasons which ranged from political will power to governmental policies has religious sentiments to contend with too. Some Nigerians would rather pray against disasters than insure against them.
Yet, insurance is not complicated. It is simply, an insurer ensuring installment for an unsure future occasion, while the insured or the policyholder pays an agreed premium to the insurer in return for that security. Since insured events are non-predictable, insurance firms only know whether a profit or loss is made at the end of a business year.
Despite the plethora of uncertainties that plague the sector, LASACO Assurance has consistently weathered the storms in its 4 decades of rising through the ranks, to become one of the biggest insurance firms in Nigeria.
After going through several expansion moves, business modifications, and review of the minimum capital base by NAICOM; the company still stands strong as one of the foremost insurers, among the 57 registered insurance companies in Nigeria.
Our company profiles for the week beams its searchlight on LASACO Assurance Plc.
- Though incorporated in December 20, 1979, as Lagos State Assurance Company Limited, LASACO did not list on the main board of the Nigerian Stock Exchange until 1991.
- It obtained its license as an insurer on July 7, 1980 and commenced operations the next month, with an authorized and fully paid-up share capital of N500,000. It offered several insurance options to the client base which was just starting out in Lagos state.
- Changed its name to LASACO Assurance Plc in July 1988
- In 1991, the company decided to explore the vast opportunities that could be obtained from increased capitalisation; and admitted its shares into the NSE through listing by introduction.
- With the capital available, the company’s operations over the next three decades expanded considerably to a network of about 13 regional and branch offices across Nigeria.
- The recapitalization exercise in 2007, to transact in Life and Non-life brought with assets to N8.26 billion; and LASACO Life Ltd with a capital base of N2b.
- The Directors proposed a dividend of 5kobo per share for the year ended 31 December, 2019
Now, its operations span all classes of the Insurance and Special Risks business, high impact financial services and Real Estate. With a current Market Capitalization of N1.83 Billion, issued and fully paid capital of 7,334,344,000 at 50 kobo each, it continues to be recognized as one of the notable insurers in the country.
According to information available on the NSE website, the company obtained a life insurance business license from National Insurance Commission (NAICOM) in 2007, and then separated the Life business, the assets, and liabilities to its subsidiary, LASACO Life Assurance Company Limited which commenced operations in January 2009.
However, a court sanction in 2014 merged the operations of LASACO Life Company Limited and LASACO Assurance Plc to become a Composite Insurance Company, and this was approved by NAICOM. LASACO Life Assurance Company Limited, then ceased to exist as a Private Company, and became a department under LASACO Assurance Plc.
The 7- member Board of Directors is currently chaired by Mrs. Disu Aderinola, who joined in November 2015. Mr Segun Balogun is the Managing Director, and other members of the board include Engineer Ndanusa Sani (Director), Mr. Akinola Odusami (Director), Mr. Akin Doherty (Director), Mr. Abiodun Razzaq (DMD, Technical), and Mr. Oshinusi Rilwan (DMD, Corporate Services).
Operations and financial performance
Over the decades, LASACO has successfully captured a significant share of key Federal and State Governments Insurance businesses, multinational and private companies, underwriting businesses in different sectors of the economy, including heavy Engineering & Construction, Banking & Finance, Manufacturing, Agriculture, and Tourism. It also covers special risks areas of Oil & Gas, and Aerospace.
It operates in the Non-life business and Life business insurance, providing various classes of insurance such as general accident, fire, motor, engineering, marine, bond insurances, and life assurance businesses.
As part of moves to ensure financial stability, the company has activated non-core business investments, and diversified its business interests to include Real Estate. It also holds shares in some blue-chip enterprises.
According to its Financial statement 2019 , Gross Premium Income (GPI) increased by 21% from N8.024 billion the previous year to N9.748 billion in 2019, while its Gross Premium Written (GPW) increased by 4% from N9.014 billion in 2018 to N9.341billion in 2019.
It also achieved an Underwriting Profit of N2.298 billion, an 8% rise when compared with N2.121 billion recorded in 2018, while Claims paid was N2.171 billion, compared with N1.801 billion paid in 2018, indicating a 21% increase.
The insurer annuity fund increased by 21% from N31.873 million in 2018 to N262.499 million in 2019.
In spite of all these, the Profit After Tax dropped by 57% from N736 million in 2018, to N315 million.
In its recently released Q1 2020 result, the company saw its Profit after tax grow to N266.371 million, up 3.85 % from the N256.503 million in Q1 2019. The Q2 2020 unaudited statements also reveals a profit after tax of N632.017 million, a growth of 5.59% when compared with N598.547 million in Q2 2019.
The company grew its Gross Premium to N6.947 billion during the period from N6.877 billion in Q2 2019. Despite that, Underwriting profit dropped by 19.60% to N1.063 billion from N1.322 billion.
Defaults and sanctions
LASACO Assurance Plc was one of the companies that defaulted the deadline in 2020, for filing its audited FY 2019 financial statement; a move it attributed to unforeseen disruptions caused by the pandemic.
This however, was not the first time the company would default on such procedures, and even the Compliance Status Indicator Code for LASACO Assurance Plc says, “MRF”. This means that the company was guilty of missing a regulatory filing deadline.
Earlier this year, Nairametrics reported the list of companies fined by the NSE, for various regulatory breaches, and LASACO Assurance Plc was one of the companies fined for failure to file financial statement.
In August, the company launched an instant rescue solution, tagged LASACO Blue Response. The response solution aims to provide free tow service for vehicles with severe damage, particularly for vehicles owners insured by LASACO, and generally for motorists operating within major parts Lagos State.
According to the statement from the company, this is part of the customer satisfaction drive, and hopes to make policyholders get faster compensation under their motor insurance policies by solving, “the most critical aspect of claim assessment, and settle minor automobile insurance claims immediately”.
LASACO also recently paid claims to relatives of 32 deceased workers under the Group Life Assurance Policy of Lagos State.