Regency Insurance Q1 profits surge by 102.8%

Regency Alliance Insurance plc has recorded impressive first quarter (Q1) results with profits surging by 102.8 percent.The stellar performance is coming amid the ‘No premium, No cover’ policy of the National Insurance Commission (NAICOM).

The new code of ethics made it mandatory that no insurance policy would be renewed or issued last year, unless full premium was paid for the insurance cover.

For the first three months of the year, the insurer’s gross premium written surged by 99.8 percent to N1.066 billion from N697.1 million the same period in the prior year (Q1 2013).

The insurer was able to expand its underwriting capacities as net premium income spiked by 38.93 percent to N707.14 million in Q1 2014, compared with N382.37 million as of Q1 2013.

Underwriting income in the review period increased by 56.35 percent to N416.35 million as against N266.58 percent as of Q1 2013, this is due predominantly to an 83.70 percent spike in fee and commission.

This is one of the most impressive and stellar performance by any insurance firm analysed so far by BusinessDay.

Profits before tax (PBT) surged by 102.80 percent to N335.92 million in Q1 2014, from N165.65 million as of Q1 2013 – buoyed by 2473 percent increase in other operating income.

Profit after tax (PAT) followed the same growth trajectory as it also spurt by 95.0 percent to N275.21 million, compared with N141.13 million as of Q1 2013.

Costs were however high as claims and other expenses increased by 416.17 percent to N191.71 million in Q1 2014, from N37.14 million as of Q1 2013, while management expenses increased by 19.5 percent to N166.82 million.

However, the insurance sector contribution in the Nigeria economy needs improvement as shown in the last rebasing of the Nigeria economy figures. In the last Gross Domestic Product (GDP) rebasing exercise, the insurance sector accounted for 0.56 percent of the total estimated figure of N80.22 trillion.

This underscores the need for Nigerian insurers to introduce products that will penetrate the markets as this will help increase insurance contribution to the Nigerian economy.

Regency’s total assets were up 25.34 percent to N6.33 billion in Q1 2014, compared with N5.97 billion as of Q1 2013.

Return on average equity (ROaE) increased to 6.34 percent in Q1 2014, from 4.06 percent in Q1 2013, while return on average assets (ROaA) moved to 4.34 percent in Q1 2014, as against 2.97 percent as of Q1 2013.

The company’s share price closed at N0.50 – June 23, 2014, on the floor of the Nigerian Stock Exchange, while market capitalisation was N3.33 billion on the same day.

BALA AUGIE