Great Nigeria Insurance (GNI) Plc’s has posted a significant upturn in underwriting income leading to impressive results as the company continues to introduce marketing penetrating products with a view to increasing its share of the market.
For the year ended December 2014, GNI’s net underwriting income increased by 23.55 percent to N2.57 billion from N2.08 billion the previous year.
The Nigeria insurer’s business is not in financial difficulty as its combined ratios (CR) of 77.30 percent though higher than the 69.01 percent recorded last year, are within the 100 percent threshold.
A combined ratio in the insurance world is the combination of claims ratio and expense ratio.
When the combined ratio is under 100 percent, underwriting results are generally considered profitable; when the combined ratio is over 100 percent, underwriting results are generally considered unprofitable.
While most insurance companies are grappling with falling premium income as a result of poverty, lack of trust and macroeconomic headwinds, GNI’s gross premium written were up by 7.81 percent to N2.81 billion in 2014 as against N3.05 billion in 2013.
The company’s earned premium income was up by 13.58 percent to N2.76 billion in the period under review compared with N2.43 billion in 2013. Net insurance premium revenue spiked by 23.46 percent to N2.51 billion in 2014 from N2.08 billion
The aforementioned challenges make the country’s insurance market fragmented despite its huge population.
According a 2015 report by KPMG on the insurance sector, there are 32 non-life insurers, 17 life insurers, and 10 mixed companies catering for a total market of $1.6 billion (N320 billion). That gives an average of $28 (56 billion) premiums per insurance.
GNI is aggressive about the settlement of claims to policy holders as total claims expenses spiked by 79.02 percent to N1.40 billion in 2014 compared with N782.51 million.
Claims ratios jumped to 55.77 percent in 2014 from 38.46 percent in 2013.
This means out of every N1 the company generated in premium income or revenues, it spent N55 on claims expenses. Underwriting expenses were up by 36.62 percent to N1.94 billion in the period under review while management expenses increased by 16.91 to N1.05 billion in 2013.
In order to enable customers pay for its services without stress, GNI has introduced PayDirect and Quickteller payment solutions.
This innovative product will make it easier for its existing and potential customers to pay for their respective insurance and financial services at any bank branch in the country.
“While PayDirect offers a customer the opportunity to complete an insurance transaction in any bank nationwide, Quickteller on the other hand operates on simple easy-to- do steps that are self-explanatory,” said Fasasi Kaseem, Head, Information Communications and Technology of the company.
GNI has a total assets of N10.22 billion , while share price and market capitalization were N0.50 and N1.91 billion respectively.
BALA AUGIE
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