A cursory look at the financial statement of the largest insurance companies in Nigeria shows Custodian Investment Plc’s net income of N7.11 billion as at December 2018 is the largest in the entire industry.
This is followed by Leadway Assurance Limited with N6.02 billion in the period under review while FirstBank Assurance Limited ranked third with N5.94 billion in net income; AIICO Insurance was fourth with N3.15 billion in net income in the period under review.
Fifth on the list is Zenith Insurance with N2.80 billion while AXA Mansard was fifth with N2.42 billion in net income; NEM Insurance came sixth with N2.03 billion.
Slow growth in premium income, a weak investment returns, rising claims, underwriting, and management expense have eaten deep into profit while margins are moribund.
The combined profit after tax of sixteen largest insurers fell by 26.52 percent to N24.03 billion in December 2018 from N32.71 billion the previous year.
A breakdown of the figure shows Leadway Assurance’s net income dipped by 56.45 percent to N6.02 billion from N13.83 billion as at December 2017.
The largest insurer by asset, and equity saw net profit margin reduce to 8.41 percent in the period under review from 19.81 percent the previous year.
Experts are of the view that the new rules by regulator will help shore up the capital bases of companies; the rules will also enable firms take on more risk since there will be an improvement in liquidity position.
In the new capital base, life insurance companies will now have a minim paid-up capital of N8bn from its previous N2bn, General Insurance companies will now have to recapitalize to N10bn from N3bn, while Composite Insurance companies will now need N18bn to underwrite businesses from the previous N5bn minimum capital.
BALA AUGIE
