Consolidated Hallmark net income up 120 percent on low combined ratios

Consolidated Hallmark Insurance (CHI) Plc is on a growth trajectory as the company’s low combined ratios in the third quarter of the year meant good real underwriting results.

The Nigeria insurer’s combined ratios (CR) fell to 53.33 percent in the first nine months through September 2015, compared with 68.15 percent the previous year.

In the insurance world when the CR is under 100 percent, underwriting results are generally considered profitable; when the combined ratio is over 100 percent, underwriting results are generally considered unprofitable.

The CR is the summation of claims ratio and expense ratio.

As a result of lower CR, Consolidated Hallmark recorded positive real underwriting results of N1.13 billion which means the insurer has outperformed some peer rival companies. Underwriting profit increased by 62.76 percent N1.25 billion.

While insurance penetration remains low in Africa largest economy, Consolidated Hallmark’s net premium income jumped by 32.95 percent to N2.43 billion in 2015 as against N1.83 billion last year.

Gross premium written moved by 27.56 percent to N4.93 billion in 2015 from N3.87 billion last year.

Consolidated Hallmark translated top line impressive performance to bottom line growth as net income increased by 120.46 percent to N389.74 million in 2015 as against N176.78 million last year.

Underwriting expenses were down by 17.81 percent to N587.12 million in 2015 from N714.38 million last year.

The Nigeria insurer’s underwriting ratio moved to 24.16 percent in September in 2015 from 39.16 percent last year. This means the company is spending less on underwriting expenses to generate each unit of premium income. Net claims expense jumped by 34.12 to N713.04 million.

Consolidated Hallmark Managing Director, Eddie Efekoha,  attributed the modest results to high premium the firm has continued to place on customer service and the attention given to prompt claims settlement.

Efekoha said the firm is desirous of maintaining excellent customer service reputation, as it currently leverages on technology to ensure seamless transactions through the deployment of e-payment channels, whilst also engaging more with numerous customers through the social media platforms.

Consolidated Hallmark’s share price closed at N0.50 on the floor of the exchange while market capitalization was N3 billion.

 

BALA AUGIE