Consolidated Hallmark Insurance (CHI) Plc, the company that provides a wide range of insurance packages said premium income increased in the first six month of the year as analysts raise questions over Takaful insurance penetration in Africa largest economy, given the policy’s success in Asia.
For the first six months through June 2015, Consolidated Hallmark’s net premium income increased by 29.57 percent to N1.84 billion, from N1.42 billion the previous year.
Despite low insurance penetration in Africa largest oil producer, CHI’s gross premium written jumped by 28.78 percent to N3.49 billion in June 2015, compared with N2.71 billion last year.
Analysts say the Insurance Industry has a lot of catching up to given its abysmal contribution to the GDP and as its Takaful Insurance though in its embryonic state, lags behind Asia countries.
For instance, in Indonesia, the demand for Islamic life insurance has spiked as premium income soared by 50.35 percent to $156.8 million (N31.36 billion) in the first three months of the year, compared with the corresponding period of last year, according to the Financial Services Authority (OJK) in its report on the first quarter of this year.
Indonesia’s N31.36 billion premium income from Takaful for the period is equivalent to 31.30 percent of the N97.01 billion total gross premium income recorded by the Nigeria insurance firms in the first quarter of 2015.
Indonesia’s Muslim population is 87 percent of the country’s total population of 252 million. This compared with Nigeria where the Muslim population is 50 percent of the its 170 million population a favorable destination for Takaful operations.
The National Insurance Commission (NAICCOM), the Apex body that regulates Insurance business in Nigeria introduced Takaful in 2008 in order to deepen insurance penetration.
The Nigeria insurance sector contributed less than 1 percent to an economy of N80.22 trillion ($510 billion), a ratio which is eclipsed by South Africa and Kenya.
Consolidated Hallmark’s profit after tax spiked by 76.68 percent to N333.72 million in June 2015, as against N188.92 million last year. Net under writing income jumped by 26.97 percent to N1.93 billion.
Consolidated Hallmark is aggressive about the settlement of claims to policy holders as claims ratio jumped to 28.50 percent in June 2015, as against 24.36 percent the preceding year.
The insurer is minimizing costs while maximizing profit as operating expenses remained flattish at N1.10 billion. Operating expenses ratio was down to 59.78 percent in June 2015 compared with 74 percent last year.
This means the company is reducing the amount spent on expenses out of every unit generated in net premium income.
BALA AUGIE
