Mutual Benefits Assurance Plc’s ability to reduce claims expenses and keep operating expenses at a reasonable level has paid off as the company’s profit surged 635.62 percent to end 2014 financial year.
Profit was N4.09 billion in 2014, compared with N555.75 million the previous year, the Lagos-based company said in an e-mailed statement on the website of the NSE.
Mutual Benefits return on equity (ROE) of 65.86 percent is the highest among its peer rivals quoted on the NSE. The 65.86 percent ROE is an increase from 42.57 percent recorded in 2013. It means the company is utilizing shareholders resources in generating higher profit.
The insurer’s bottom line got a boost from a 37.75 percent decrease in claims expenses, 1.71 percent reduction in operating expenses and a 23.20 percent increase in other operating income.
Mutual Benefits stellar performance validates insurance sector growth as 60 underwriters raked in over N300 billion premiums in 2013 on the strength of growing confidence and adherence to strict corporate governance.
For the first three months through March 2015, the Nigerian insurance industry’s total assets grew N793.6 billion, while the total premium as at the end of 2014 according to the National Insurance Commission(NAICOM), stood at N302 billion
Analysts attribute the improved premium income for the insurance and reinsurance industry to the regulations put in place by regulators such as the ‘No Premium No Cover’ and the Takaful policies.
NAICOM is also making property insurance mandatory in the nation of more than 170 million people.
Mutual Benefits gross premium written increased by 90.27 percent to N15.45 billion in 2014 from N8.12 billion the previous year. This means the company is tapping into the Nigeria market.
Gross premium income spiked 102.21 percent to N15.53 billion in 2014 as against N7.68 billion in 2013. Net premium income grew by 38.98 percent to N9.34 billion in the period under review compared with N6.72 billion the preceding period.
Total underwriting increased by 50.80 percent to N10.30 billion in 2014 as against N6.83 billion in 2013.Profit before tax surged 396.12 percent to N4.52 billion in 2014 from N911.07 million.
Total assets increased by 31.51 percent to N42.39 billion in 2014 from 32.24 billion the previous year.
Shareholder’s funds surged 161.76 percent to N6.21 billion in 2014 from N2.14 billion in 2013, thanks to a 76.25 percent drop in negative retained earnings.
Mutual Benefits share price closed at N0.50 on the floor of the exchange while market capitalization was N4 billion.
BALA AUGIE
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