Yemisi Izuora
Great Nigeria Insurance, a company that provides various insurance services which include life, pension, and special risks is not at its best performance as it just recorded low profit margins.
The company for the year ended December 2013, reported that its net income fell by 98.60 percent to N12.70 million, from N903.09 million the same period of the corresponding year 2012.
Earnings per share slid by 39.80 percent to 33k in 2013, as against 23.60k the previous year.
The company’s underwriting profit margin (UPM) stood at 0.60 percent, which is less than 1 percent and means out of underwriting profit of N2.08 billion, but it was able to muster only N12.70 million in profit.
The low UPM was due to huge underwriting expenses of N1.42 billion that overwhelmed underwriting profit.
Also the company’s underwriting capacity was inefficient as gross premium income reduced by 12.60 percent to N2.43 billion in 2013, from N2.78 billion the previous year.
Net premium income reduced by 16.80 percent to N2.03 billion as the insurer continues to grapple with rising underwriting and operating expenses.
Great Insurance operating expenses were up by 3 percent to N910.78 million in 2013, while underwriting expenses increased by 12.70 percent to N1.42 percent.
Profit before tax (PBT) reduced by 64.72 percent to N449.70 million compared with N1.27 billion last year.
Total asset increased by 19.21 percent to N10.05 billion in 2013, from N8.43 billion in 2012.