Yemisi Izuora
Niger Insurance Nigeria Plc has declared a 10.07 percent rise in profit despite the volatile business environment, with a profit of N690.96 million in 2014, compared with N627.42 million the previous year, the company said, indicating 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.
Niger Insurance is also 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.