Coronation Insurance has posted a profit after tax at N810 million in the first quarter of 2022, a 27% high compared to the N639 it reported in the first quarter of last year.
According to the report, the increase posted was on the back of significantly improved income for the period. During the first three months of 2022, the insurer raked more than it did a year ago. However, the expenses also went high during the period, eating up the figure and causing the insurer to post its profit in millions even though its premium income was in billion.
The increasing spending is believed to be the result of excessive spending during the period as inflation rate swings double-digit, causing the insurer to spend more than it did same period last year. In addition, a slowdown in income level also affected the profit level.
Key highlight of the result
The gross written premium was valued at N7.6 billion in the first months of the year while the gross premium income was N4.8 billion. Compared to last year, the gross written premium was N5.2 billion and gross premium income was N3.5 billion.
- The rise in income is on the back of continuous recovery from the Covid pandemic. The year 2022 saw a lot of people prioritise insurance as against the year 2020 when the insurer was at the bottom list as people prioritized survival.
- With reinsurance expenses valued at N1.3 billion, Net premium income stood at N3.4 billion in the first quarter of this year while fees and commission income at N277 million drove the net underwriting income to N3.7 billion during the period. The amount depicts 45% year-on-year increase from the N2.5 billion last year.
- The company paid N1.7 billion as claim expenses in the first months of 2022 while the outstanding claims was N926 million and claims expenses recoverable was N211 million. These reflected a net claims expenses at N587 million in the first quarter. Compared to last year, the value for the same purpose amounted to N1.3 billion.
- A cursory look at the data shows that inflation had a minimal impact on the insurer as the claims paid in the quarter was N1.7 billion, a slight rise from N1.6 billion in the previous quarter. However, this was more pronounced on other operating expenses which was valued at N1.4 billion against the N1.1 billion utilized for the same purpose last year as well as on underwriting expenses which were valued at N768 million against N535 million last year.
- Similarly, the insurer saw a decline in total investment and other income to N634 billion from N919 billion in first quarter as a result of a dip in investment income, profit of deposit administered contract as well as other operating income.
In spite of the profit marked by the insurer in the first quarter, analysts believe the insurance firms and insurance industry in general still have the capacity to deliver more than it is currently offering if only the industry’s potential could be unleashed.