Ninety percent of the underwriting profits made by AIICO Insurance, Sovereign Trust and AXA Mansard Insurance from non-life insurance segment was realised from four insurance activities in 2018, an indication of the depth of insurance practices in the country. The four activities are motor insurance, engineering, accident and fire insurance services. That most of the non-life underwriting profit came from just four services shows the most profitable insurance services in the last financial year.
The three aforementioned firms realised N7.18 billion underwriting profit and the portion that came from motor insurance amounted to N2.98 billion representing 42 percent of the gross underwriting profit by three firms. Engineering insurance generated N1.49 billion which translated to 21 percent of underwriting profit. Accident insurance comprising personal and general, earned the three insurers N1.28 billion representing 18 percent of the entire underwriting profit for 2018.
The three aforementioned insurance firms earned N730.5 million from fire insurance which translated to 10 percent of the underwriting profit. This implies that the underwriting profits from the four insurance services amounted to N6.48 billion or 90 percent of the total underwriting profit by AIICO, Sovereign Trust and AXA Mansard insurance companies in 2018.
Marine insurance generated N648.07 million representing 9 percent share of the underwriting profit. Both casualty and liability insurance services earned N422.6 million and N48.41 million which amounted to 6 percent and 1 percent of the total underwriting profit made by the firms respectively in 2018.
On the flip side, contributions from aviation, oil and gas insurance services were negative during the period. The combined underwriting loss from aviation insurance stood at N119.5 million while the loss from oil and gas insurance services equalled N304.02 million.
Stakeholders may have to wait for some weeks to be able to appraise the financial status of the insurance industry in Nigeria. This is because a number of insurance firms have applied to the Exchange to be given more time before they could release their audited financial statement for 2018.
The list includes Law Union and Rock, NEM Insurance and Wapic Insurance, among others. According to WAPIC Insurance, which might not submit the first quarter 2019 unaudited results as mandated by the regulators within then stipulated time, the delay in the submission of the Q1 2019 results was as a result of the delay in submitting the audited financial statement for 2018 to the National Insurance Commission (NAICOM) as a result of the adoption of the IFRS 9 on financial instruments and IFRS 4 (as amended for insurance contracts) in compliance with the directive of NAICOM.
That is similar to the reason given by NEM Insurance for the delay in the release of the 2018 audited financial statement.
“Our industry regulator , the National Insurance Commission (NAICOM) is currently reviewing the company’s audited financial statements and has requested that we provide additional documentation in respect of the newly adopted IFRS 9 full option adoption approach”, NEM management said in a note to the Nigerian Stock Exchange (NSE).