Niger Insurance profit rises 10.07 percent despite volatile business environment


Niger Insurance Nigeria Plc has recorded a 10.07 percent rise in profit despite the volatile business environment in Africa’s largest economy.
Profit was N690.96 million in 2014, compared with N627.42 million the previous year, the Lagos-based company said in an e-mailed statement on the NSE.
This means that Niger insurance is maximizing the value of its owners.

The higher profit will increase investor’s appetite for the company’s share as they await high returns on their investment.
The impressive results validate the focus strategy and market penetration strategy of the savvy management and board of directors of the Nigeria insurance giant.
Management’s ability to cut costs also help catapult  profit  as management expenses reduced by 29.27 percent to N3.31 billion in 2014 compared with N4.68 billion in 2013.
Insurance firms in Africa largest oil producer are operating in an unpredictable environment bedeviled with high unemployment rate, rising inflation, insurgency in the north part of the country, high interest rate and weak consumer spending.
The aforementioned hash operating environment hinders firms from deepening insurance penetration.
Former Coordinating Minister for the Economy and Minister of Finance, Ngozi Okonjo-Iweala also identified the challenges facing the industry as lack of consumer trust, fragmentation of the industry, low enforcement of compulsory insurance policies, lack of professionalism by some agents and brokers in the industry, and a general shortage of skilled professionals in the entire industry.
While some insurers are lurching as a result of harsh business environment, Niger Insurance is pushing for growth as gross premium written increased 6 percent to N11.06 billion in 2014 compared with N10.44 billion the previous year.
Net premium income was up 1.45 percent to N9.79 billion in 2014 as against N9.65 billion in 2013.
Niger Insurance is increasing equity in the business and also improving on its insurance fund as investment income surged by 46 percent to N1.15 billion in 2014 from N790.54 million in 2013.
The company attributed the growth in investment income to its implementation of NAICOM directives on “No Premium No Cover, Policy” from 1st January 2014. The policy aims to stimulate liquidity within the system by reducing the huge receivables being carried on the statement of financial position of insurance companies.
“This will positively impact the income statements of insurance companies by eliminating the large portion of outstanding premium charge for the receivables and make available more cash which can be used to generate more investment income,” the company said in its 2014 published accounts.
Niger Insurance is intensifying paying claims to clients as its claims ratio increased to 37.88 percent in 2014 from 35.72 percent in 2013.  Claims expenses in the period under review was N4.19 billion, representing an increase of 12.33 percent from N3.72 billion recorded last year.
The company’s share price closed at N0.50 on the NSE while market capitalization was N3.87 billion.
BALA AUGIE