Consolidated Hallmark Insurance plc is on a growth trajectory as premium income spiked 61.47 percent, an impressive performance that means the Nigerian company is tapping into the country’s growing economy.
For the first three months through March 2015, Consolidated Hallmark’s gross premium income surged 61.47 percent to N1.97 billion, from N1.22 billion the same period of the corresponding year (Q1) 2014.
The company’s underwriting capacity is efficient as net premium earned moved by 4.45 percent to N993.96 million in Q1 2015 as against N950.75 billion the previous year. Gross premium written spiked by 47.22 percent to N2.12 billion.
Underwriting profits were up 12.40 percent to N712.81 million in 2015 from N373.20 million in 2014.
Analysts say though Consolidated Hallmark recorded growth in premium income, the industry’s contributions to the economy remain abysmal.
The insurance sector contributed less than 1 percent to the total rebased GDP of N80.22 trillion. This compares with South Africa’s insurance contribution of 15 percent to its GDP and Kenya’s contribution of 3.40 percent contribution to its $53 billion economy.
South African’s insurance penetration is the fastest in the whole world.
Analysts identified challenges befalling insurance companies operating in Africa largest economy as culture, general mind-set of people to insurance and lack of human capital, poor corporate governance issue, poor business infrastructure facilities and lack of awareness on the part of consumers on the uses and/sustainability of insurance products.
Consolidated Hallmark has overcome the headwinds as profit after tax (PAT) increased by 12.25 percent to N285.17 million in 2015 from N254.03 million in 2014.
Profit before tax (PBT) followed the same growth trajectory as it jumped by 12.43 percent to N419.83 million in 2015, as against N373.40 million in 2014.
The company’s reinsurance expenses surged by 262.02 percent to a record N977.75 million, while management expenses reduced by 29 percent to N216.89 million.
Management expenses moved by 18.60 percent to N303.64 million in 2015 from N255.96 million as of March 2014.
The future of the insurance industry is auspicious as Nigeria’s young and growing population opens the doors of opportunities for the sector to tap into.
“Even at 2.6 percent annual growth rate would have accommodated 4 million of the population,” said Bismarck Rewane, CEO, Financial Derivatives Company, at the 2015 Insurance Sector Outlook.
“Stable economic growth projected at 6.2 percent is favourable for business and insurance as an important arm of the financial services market would benefit,” said Rewane.
Consolidated Hallmark’s share price closed at N0.50 on the NSE, while market capitalisation was N3 billion.
BALA AUGIE
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