The after-tax profit of 10 listed insurance companies in Nigeria rose by 92 percent in the first six months of 2024, according to data compiled by BusinessDay.
According to the latest financial statements of the insurers, their after-tax profit grew to N114.7 billion in the first half from N42.3 billion in the same period of 2023.
The companies are Cornerstone Insurance, AXA Mansard Insurance Plc, Custodian Investment Plc, AIICO Insurance Plc, NEM Insurance Plc, Consolidated Hallmark Holdings, Linkage Assurance Plc, Prestige Assurance Plc, Sovereign Trust Insurance Plc, and Guinea Insurance.
The increase in these insurance companies’ after-tax profit is driven by the surge in gross premium written, penetration, among other key financial performances in the period under review.
Further analysis revealed that Cornerstone Insurance Plc recorded the highest growth in profit of N27.9 billion, followed by AXA Mansard with N25.1 billion, and Infinity Trust (N22.4 billion).
In terms of revenue, AXA Mansard recorded the highest of N65.6 billion, followed by Custodian Investment Plc (N60.9 billion) and AIICO Insurance (N48.8 billion).
However, despite the foreign exchange crisis in Nigeria, seven of the listed insurance companies recorded a foreign exchange gain of N69.8 billion in H1 from N30.3 billion due to increased demand for investment.
The fluctuation of the naira impacted foreign exchange availability in the economy, causing the exchange rate to rise both in the official and parallel markets.
The official exchange rate surged from N463.38/$ on June 9, 2023, to N1,625.88 on Thursday, September 5th with the parallel market rate reaching N1,645/$.
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The Central Bank of Nigeria (CBN) raised the interest rate from 18.75 percent to 26.75 percent between July 2023 and July 2024 to rein in inflation and stabilise the naira.
According to Nigeria’s Gross Domestic Product Q2’24 report, the financial and insurance sector recorded a 6.57 percent increase in the second quarter of 2024 compared to 5.26 percentage points in the 2023 second quarter.
The finance and insurance sector consists of two subsectors: Financial Institutions and insurance, in which the former accounted for 91.89 percent and the latter 8.11 percent of the sector respectively in real terms in Q2 2024.
“Growth in this sector in real terms totaled 28.79 percent, higher by 1.95 percent points from the rate recorded in the 2023 second quarter and lower by 2.44 percent points from the rate recorded in the preceding quarter,” data from the National Bureau of Statistics disclosed.
Analysis of individual firms:
Cornerstone Insurance Plc
Cornerstone Insurance’s after-tax profit rose to N27.9 billion in the first six months of 2024 from N9.8 billion in the same period last year.
Its revenue increased to N16.9 billion from N9.7 billion while its insurance service expenses grew to N9.5 billion from N6.06 billion.
The insurer’s foreign exchange gain increased to 27.6 billion from N13.5 billion resulting in an increased investment return of N29.2 billion.
AXA Mansard Insurance Plc
AXA Mansard’s after-tax profit rose to N25.1 billion in the first six months of 2024 from N13.1 billion in the same period last year.
Its revenue increased to N65.6 billion from N39 billion while its insurance service expenses grew to N36.9 billion from N23.4 billion.
The insurer’s foreign exchange gain increased to 23.9 billion from N11.2 billion resulting in an increased investment return of N26.8 billion.
Custodian Investment Plc
Custodian Investment’s after-tax profit rose to N22.4 billion in the first six months of 2024 from N4.9 billion in the same period last year.
Its revenue increased to N60.9 billion from N41.4 billion while its insurance service expenses grew to N24.8 billion from N19.9 billion.
The insurer’s net realised gains on foreign exchange and financial assets including property and equipment increased to 3.2 billion from N109.2 million resulting in an increased investment return of N33.5 billion.
AIICO Insurance Plc
AIICO Insurance’s after-tax profit rose to N13 billion in the first six months of 2024 from N5.9 billion in the same period last year.
Its revenue increased to N48.2 billion from N32.3 billion while its insurance service expenses grew to N38.5 billion from N27.4 billion.
The insurer’s net foreign exchange income increased to 10.8 billion from N3.4 billion resulting in an increased investment return of N14.2 billion in H1.
NEM Insurance Plc
NEM Insurance’s after-tax profit rose to N10.6 billion in the first six months of 2024 from N3.5 billion in the same period last year.
Its revenue increased to N45.5 billion from N26.6 billion while its insurance service expenses grew to N21.8 billion from N18.8 billion.
The insurer’s net service income increased to 15.6 billion from N4.9 billion. While it recorded a loss in its net fair value and credit impairment, the investment return declined to N693.8 million.
Consolidated Hallmark Holdings
Consolidated Hallmark’s after-tax profit rose to N7.5 billion in the first six months of 2024 from N989.6 million in the same period last year.
Its revenue increased to N12.8 billion from N7.7 billion while its insurance service expenses grew to N9.6 billion from N3.7 billion.
The insurer’s foreign exchange gain increased to 3.1 billion from N263.7 million while its net interest income grew to N7.08 billion.
Linkage Assurance Plc
Linkage Assurance’s after-tax profit rose to N4.03 billion in the first six months of 2024 from N2.9 billion in the same period last year.
Its revenue increased to N10.8 billion from N6.3 billion while its insurance service expenses grew to N7.8 billion from N3.08 billion.
The insurer’s foreign exchange gain increased to 2.2 billion from N1.4 billion while its net insurance service income grew to N1.2 billion.
Prestige Assurance Plc
Prestige Assurance’s after-tax profit rose to N2.8 billion in the first six months of 2024 from N559.8 million in the same period last year.
Its revenue increased to N8.9 billion from N6.3 billion while its insurance service expenses grew to N5.9 billion from N3.08 billion.
The insurer’s net foreign exchange gain increased to 2.02 billion from N416.8 million resulting in an increased investment income of N3.09 billion.
Sovereign Trust Insurance Plc
Sovereign Trust’s after-tax profit rose to N976.4 million in the first six months of 2024 from N465.8 million in the same period last year.
Its revenue increased to N23.6 billion from N12.2 billion while its insurance service expenses grew to N5.08 billion and net expenses from reinsurance contract held increased to N16.3 billion.
Guinea Insurance Plc
Guinea Insurance’s after-tax profit rose to N358 million in the first six months of 2024 from N19.3 million in the same period last year.
Its revenue increased to N1.3 billion from N874.7 million while its insurance service expenses grew to N600.5 million from N425.5 million.
The insurer’s net investment income grew to N157.5 million from N72.9 million.
