NEM Insurance Plc has announced the performance for 2020 operations which surged above local and foreign challenges to earn the board chairman Dr. Fidelis Ayebae, endorsement of excellent results of gross premium of N22bn, an increase of 12% over 2019 N19.8bn and another 112% increase in profit after tax from previous N2.4bn to N5.08bn for the company and the group and 9kobo per share dividend.
The company’s strength to take more risks showed in the 25% increase in earned premium moving up from N12.6bn to N15.8bn. The options for investing earned premium were constrained by the crash in the interest rate in commercial paper though, the “management was proactive enough to take the advantage of other investment opportunities to generate an income on investment of N1bn as against the previous income on investment in 2019 which was N878.2m. This resulted in increase of about 14.3%.”
The gross claim obligation increased by 15% in the period under review registering N8.4bn compared to the former figure of N7.3bn. The net claims expenses of N6.05bn was incurred, 53% higher than that of the preceding period which recorded N3.9bn. The net claims ratio for 2020 was 27% as against 21% the previous year.
The performance also recorded increases of N5.9bn, N5.5bn and N4.2bn in the group’s financial and total assets and also total equity respectively. The parent company had same figures save for total equity which recorded a slight increase of N4.3bn. The group’s earning per share was 96kobo, the previous mark was 45kobo.
In his remark the group managing director/CEO, Mr. Tope Smart, said despite the local and global difficult terrain, NEM Insurance “showed resilience and we were able to post impressive results.”
He also noted that the National Insurance Commission showed concern with regard to the recapitalisation which had been flagged off before COVID-19 set in and rescheduled compliance dates having looked at the impact of COVID on the insurance companies and decided to break the exercise into two phases. However, despite the cap on recapitalisation due to suspension by court injunction, Smart said the company has cleared the first compliance schedule bringing its paid capital to N5.01bn.
He also said the shareholders fund grew by 30% from N14bn in 2019 to N18.4bn in 2020. However, the tales of profit don’t match for the Nigeria parent company and the associate firm in Ghana. He comments: “Our profit during the period grew significantly from N2.4bn to N5.1bn, a growth of 112%. We however recorded a loss from our associate in Ghana as profit declined from N21.4m to a loss of N22m.”