Consolidated Hallmark Insurance plc ended 2013, with a loss after tax of N197.64 million as against profit after tax of N239.49 million the previous year, analysis of its audited result shows.
The consolidated financial statement filed on the floor of the Nigerian Stock Exchange showed the company posted a loss before tax of N178.19 million compared with a profit before tax of N396.13 billion.
However, gross premium income increased by 8.35 percent to N4.15 billion from N3.83 billion the preceding year.
The Nigerian insurer was inefficient in terms of underwriting capacity as net premium income shrank by 12.02 percent to N2.56 billon in 2014, from N2.91 billion last.
It would be recalled that the Nigerian government has been reeling out policies that are designed to re-position the insurance sector for better performance and also increase its contribution to the country’s Gross Domestic Product. One of such policies is the ‘No Premium, No Cover’ regulation. This is a section of the 2003 Insurance Act that stipulates that premiums must be paid for before an insurer can accept cover. This regulation was enforced by the regulator National Insurance Commission (NAICOM) with effect from January 1, 2013.
The last GDP rebased data released by the NBS showed the insurance sector contributing less than 1 percent of the total N80.22 trillion.
On the other hand, second quarter 2014 GDP report released by the NBS based on the current basis price showed insurance industry contribution increasing by 16.35 percent to N104.71 percent from N90 billion the preceding year.
Consolidated Hallmark Insurance is a general business and special risks insurance underwriting firm fully capitalised in line with statutory requirements of the industry regulatory body – the NAICOM, according to information on the company’s website.
Based on BussinessDay’s analysis, the slow growth in profit was fuelled by a 17.62 percent increase in underwriting expenses and 8.96 percent rise in management expenses, causing a 30.46 percent decline in underwriting profit.
The company said in the statement on its website that it had executed big ticket transactions in aviation, oil and gas, marine cargo and hull business and other non-life insurance underwriting including motor, fire and special perils, goods-in-transit and engineering insurance, among others.
Shareholders fund fell by 9.9 percent to N3.65 billion in the year ended 2013, from N4.02 billion the preceding year buoyed by a negative retained earnings of N96.70 billion.
Total assets were down by 7.49 percent to N6.17 billion in the period under review as against N6.67 billion the preceding year. The company’s share price closed at N0.50 on the floor of the NSE, while market capitalisation was N6.0 billion.
BALA AUGIE
