Obinna Chima and Ebere Nwoji
Equities listed on the insurance sub-sector of the Nigerian Stock Exchange (NSE) have continued to perform below expectation due to prolonged apathy on the sector.
THISDAY checks showed that most of the stocks on the sub-sector have remained as penny stocks, with a large number of maintaining their nominal value of 50 kobo in the past one year.
For instance, the share prices of Cornerstone Insurance Plc, Equity Assurance Plc, Lasaco, Mutual Benefit Assurance Plc, and Wapic Insurance, have remained at 50 kobo since the beginning of the year.
But while AXA Mansard, which appeared to be the highest priced insurance stock recorded a year-to-date appreciation of 30.5 per cent to N2.69 per share as at Monday, from the N2.06 per share it was on January 4, this year; Aiico Insurance depreciated from 95 kobo per share at the beginning of the year, to 73 kobo per share as at Monday. In the same vein, NEM Insurance advanced from 67 kobo per share at the beginning of the year, to N1 per share as at Monday.
The NSE has been hit by development in the macro-economy resulting to depreciation in the price of most equities on the Exchange. The NSE All-Share Index and market capitalisation depreciated by 0.17 per cent to close last week at 28,805.45 and N9.893trillion respectively.
Some capital market experts had said people’s apathy to insurance products generally was responsible for its poor performance on the NSE.
The Nigerian Insurers Association (NIA) in 2015 made N20.61 million from the Nigerian Insurance Industry Database (NIID), an indication that about N82.44 million was loss as a result of the 12 million uninsured vehicles on the nation’s roads. The association also said only three million vehicles in Nigeria have genuine insurance cover.
According to the Director-General of the NIA, Sunday Thomas, in a bid to enhance the verification process, the association has commenced discussions on the implementation of a faster, more robust and responsive verification gateway, adding that the implementation would soon commence.
Thomas said the collaboration entered into with government agencies had resulted in more value addition on the system and yielded results such as; provision of crash reports for the Federal Road Safety Corps; moves to integrate NIID with Nigerian Police computerised tinted glass permit system and integration of the NIID with Nigerian Customs trade system for enforcement of marine insurance.
“In the period under review, over three million vehicles with genuine insurance covers are recorded on the NIID platform. With the adoption by Lagos State and three other states, the use of the handheld verification devices as well as the provided Internet gateway for verification has been of immense benefits both to the insuring public and the law enforcement agencies,” he stated.
He said to enhance the insurance certificate verification process, the association recently commenced discussions on the implementation of a faster, more robust and more responsive verification gateway.
He said this will be implemented soon.
According to Thomas, the collaborative efforts of the association with government agencies has added more value to the NIID system’s performance, highlighting some of these collaborations as; provision of auto crash reports for the Federal Road Safety Corps, discussions with the Nigeria Police Force on the integration of NIID with computerised Tinted Glass Permit system as well as engagement with the Nigerian Customs Service for integration with their trade system for enforcement of marine insurance.
The NIID is a centralised data system for the insurance industry.