Despite the 52.66% rise in reinsurance expenses from N2.115bn in 2016 to N3.229bn, among others, the directors of NEM Insurance, on Thursday presented its audited result for the year ended December 31, 2017, showing that profit after tax grew by 52.67%. This was faster than the 24.71% increase in gross premium written, following which the board has recommended a dividend of 10 kobo per share.
Gross premium written rose from N10.757bn to N13.416bn, boosted by the N4.37bn from motor insurance business, as against the previous N3.673bn; followed by fire with N3.055bn, from N2.345bn; while general accident contributed N2.67bn, as against N2.362bn.
Gross premium income stood at N13.031bn from N10.628bn in 2016, besides the reinsurance income, reinsurance expense rose to N3.229bn from N2.115bn, with N3.373bn being reinsurance premium (cost) paid during the year, from N2.614bn. The sum of N846.093m of the amount was ceded locally, while N2.527bn went to foreign re-insurers, compared with N745.168m and N1.869bn respectively in 2016.
Net premium income therefore came to N9.801bn, as against N8.512bn.
Fee and commission on insurance income increased 20.84% to N658.353m from N544.813m; while net underwriting income rose to N10.46bn from N9.057bn.
Gross claim expenses increased to N5.128bn from N4.786bn, the bulk of which was the gross claims paid amounting to N5.011bn from N4.059bn; with N615.308m claims recorded, up from N180.455m and reinsurers recovered of N2.729bn from N1.935bn, as a result of which net claims expenses dropped 33.19% to N1.783bn from N2.669bn, out of which ; underwriting expenses stood at N4.364bn from N2.95bn, a 41.13% increase; just as investment income improved by 48.07% to N709.944m, compared to N479.472m in the prior year. Net fair value gain increased significantly from N101.015m in 2016 to N719.245m. Interest from fixed deposit contributed N530.488m from N335.081m, while dividend income stood at N99.668m from N82.233m, followed by the N50.533m interest on statutory deposits, up from N34.207m. Underwriting profit therefore stood at N4.512bn, up by 31.29% from N3.436bn.
Loss on disposal of property and equipment jumped to N25.776m from N1.334m; other income slowed down to N56.699m from N417.279m, representing an 86.41% drop; share of profit in associate rose to N99.985m, which was better than the previous N71.516m.
Management expenses rose from N2.359bn to N2.977bn, following which profit before tax improved by 44.23% to N3.094bn, as against the previous N2.145bn; while the slight drop in income tax from N327.974m to N319.499m resulted in profit after tax of N2.775bn, compared with N1.817bn in 2016. This translated to earnings per share of 53 kobo, up from 34 kobo.