AXA Mansard Plc, Nigeria largest insurer by market value recorded a half year profit growth that analysts say means the share holders of the company should expect a high return on their investment in form of dividend payments.
For the first six months through June 2015, AXA Mansard’s net income increased by 47 percent to N1.07 billion, from N732.66 million the preceding year.
The Company’s underwriting capacity was efficient as gross premium income increased by 10 percent to N10.56 billion in 2015 compared with N9.61 billion last year. Net premium earned increased by 7 percent to N4.77 billion.
Earnings per share EPS moved by 33 percent to 7.61k in June 2015 compared with 5.74k in June 2014.
Industry analysts say AXA Mansard’s scheme of business combinations has paid off given the increased earnings that have increased investors’ appetite for its stocks.
BusinessDay analysis showed the company’s bottom line received a boost from a 40 percent rise in investment and other income to N1.17 billion in the period under review.
France based AXA, one of the international leading insurance and assets management groups acquired Assurance Africa Holding that holds 77 percent in the Mansard Plc. This development forced Mansard change its name to AXA Mansard.
The group company had said Mansard Plc (the acquired company) will benefit from limitless access to global resources, capacity development, stronger brand recognition, especially in corporate space.
Further analysis of AXA Mansard showed the company paying claims to policy holders as claims ratio increased to 26.42 percent in 2015 compared with 20.18 percent in 2014. Claims expenses in the balance sheet were up by 44 percent to N2.79 billion as a result of the claims payment.
Management expenses were up 7 percent to N2.25 billion in the review period as against N2.11 billion the previous year.
Share holders fund were up by 14 percent to N18.60 billion in June 2015 as against N16.32 billion last year. Financial assets rose by 22 percent to N23.47 billion in 2015 from N19.26 billion last year.
Despite AXA Mansard stellar performance in the review period, the insurance industry needs more strategic restructuring given the sector’s 1 percent contribution to the economy of N82.22 trillion.
Industry analysts attribute the low penetration to lack of consumer trust, fragmentation of the industry, low enforcement of compulsory insurance policies, lack of professionalism by some agents and brokers in the industry, and a general shortage of skilled professionals in the entire industry.
AXA Mansard is a member of the AXA Group, the worldwide leader in insurance and asset management with 157,000 employees serving 103 million clients in 59 countries.
The company’s share price closed at N2.23 on the floor of the exchange while market capitalization was N26.56 billion.
BALA AUGIE
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