Analysis by Nairametrics has shown that a total of five Nigerian insurers namely; NEM Insurance, AIICO Insurance, Cornerstone Insurance, Consolidated Hallmark Insurance and Linkage Assurance are expecting to earn N4.7 billion Profit After Tax, PAT, in the first quarter of 2022.
This is according to financial statements sourced from the Nigerian Exchange, which show the earnings forecast for the insurers.
From the reports, NEM Insurance is expected to lead others with PAT of N2.4 billion followed by AIICO insurance with N1.1 billion while Cornerstone insurance, Consolidated Hallmark and Linkage Assurance are expected to respectively rake in N413 million, N390 million and N374 million.
NEM insurance forecasts a gross premium written at N12.2 billion in the first quarter of 2022, a 72% increase from the N7 billion in the third quarter of 2021, as well as a gross premium earned which is expected to hit N11.7 billion against N6.1 billion as of September 30th 2021.
The net premium income is expected to rise immensely reaching N9.22 billion, a significant improvement from the 4.3 billion in the third quarter of 21.
Similarly, claims on expenses in the early months of next year is expected to record N3.4 billion with underwriting expenses at N3 billion leaving the underwriting profit to close at N3.5 billion and the PAT at N2.4 billion.
AIICO Insurance forecasts a gross written premium at N25 billion in the first quarter of 2022 with a gross premium income expected to be valued at N19 billion, translating into an unexpired risk premium at 5.6 billion.
According to the insurer, the non-life business represents 30% of the stated GWP while the ordinary life, group life and annuity business represent 43%, 9% and 2% respectively.
With a total reinsurance cost at N2.6 billion, projected at an average of 10% of gross written premium, the net premium income is predicted to close at N16.9 billion and total insurance income expecting to hit N17 billion.
Total net claims incurred during the period forecast is N9.9 billion and the total underwriting cost will expectedly value N17 billion. Total underwriting profit during the period is expected to value N459 million and investment income and other income to value N3.2 billion while the profit before tax will value N1.2 billion in the first three months of next year.
Notably, AIICO insurance stated that investment will be driven largely by bond investment and investment in other short term financial assets.
Cornerstone insurance expects gross premium income to reach N9 billion in the first quarter of next year; the amount represents a huge difference from the N4.8 billion in the third quarter of 2021.
Also, the insurer expects a net earned premium at N2.3 billion in the period ended 31st March 2022 compared to the N1.3 billion as at 30th of September 2021.
While investment income is expected to rake in N756 million, and the net operating income at N1.7 billion.
Similarly, operating expenses is expected to close at N1.1 billion and the profit for the period to close at N590 million with PAT at N413 million.
Consolidated Hallmark Insurance
Consolidated Hallmark Insurance expects to rake in a total gross premium of N4.6 billion in the first quarter of 2022 with a net premium of N2.8 billion in the first quarter of 2022.
The total claims expected to be paid out during the forecast period is N968 million compared to the N632 million in the third quarter of 2021.
While investment income and net operating income will expectedly reach N407 million and N2.8 billion in the first quarter of 2022, commission incurred and underwriting and management expenses will expectedly close at N764 million and N869 million.
Also, the insurer predicts that the profit before tax during the period will expectedly reach a N572 million and profit for the period will value at N389 million.
Linkage Assurance forecasts total gross premium written at 4.5 billion in the first quarter of 2022. Compared to the GPI in the third quarter 2021 which recorded N2.1 billion, this represents 113% increment.
However, the net earned premium is expected to land at N1.8 billion during the forecast period against the N1.6 billion in the third quarter of 2022, an indication that a large chunk of the written premium will likely be unearned.
The net claim incurred and investment income in the early quarter of 2022 is predicted at N909 million and N816 million depicts a slight increase from the N751 million and N754 million in the third quarter of 2021 while the net operating income and underwriting expenses is expected to reach N2 billion and N1.6 billion respectively.
What you should know
Despite the uncertainty which the year 2022 holds as a result of Omicron, the new Covid variant, insurers are optimistic that earnings expected in the next six months will be much more than what was seen in the last quarter ended 30th September 2021 as all insurers expect an improved performance from what was seen in the past quarter.
In a recent report, the World Health Organization, warned that the Omicron Coronavirus variant is more transmissible than the Delta Strain and reduces vaccine efficacy but causes less severe symptom.