*Major firms record up to 66% decline
*Operators say no cause for alarm
By Rosemary Iwunze & Cynthia Alo
Business activities in the insurance sector took a downward position in the second quarter of 2021, Q2’21, as the sector’s major income line, Gross Premium Written, GPW, nosedived by 26.7 per cent quarter-on-quarter, QoQ, to N97.8 billion from N133.5 billion recorded in the first quarter of the year, Q1’21.
Financial Vanguard findings from the financial results recently submitted to the Nigerian Exchange Group, NGX, by 18 leading insurance companies, however show a year-on-year, YoY, increase by 19.4 per cent in Q2’21 from N81.9 billion recorded in the corresponding period of 2020, Q2’20.
Meanwhile, on QoQ basis, analysis of companies performance show that Royal Exchange recorded the highest rate of decline in GPW, as the company’s premium income line dropped by 66.2 per cent to N2.5 billion in Q2’21 from N7.4 billion in Q1’21.
Universal Insurance’s premium income recorded 62.4 percent decline in GPW to N601.5 million from N1.6 billion, while Lasaco Assurance recorded 55.2 per cent decline to N3 billion from N6.7 billion. Sovereign Trust Insurance GPW declined by 53.7 per cent to N2.5 billion from N5.4 billion.
Axa Mansard GPW declined by 51.8 per cent to N12.1 billion from N25.1 billion. Coronation Insurance GPW declined by 43.6 per cent to N3.1 billion from N5.5 billion.
SUNU Assurances GPW went down by 39.1 per cent to N1.4 billion from N2.3 billion. Nem Insurance GPW declined by 39 per cent to N6.1 billion from N10.0 billion.
Veritas Kapital Insurance GPW declined by 27.8 per cent to N1.3 billion from N1.8 billion. Consolidated Hallmark GPW declined by 25.7 per cent to N2.6 billion from N3.5 billion. Linkage Assurance GPW declined by 23.1 per cent to N3 billion from N3.9 billion.
Prestige Assurance GPW declined by 20 per cent to N2.4 billion from N3.0 billion. Cornerstone Insurance GPW declined by 13.8 per cent to N5 billion from N5.8 billion.
Mutual Benefits GPW declined by 11.1 per cent to N7.2 billion from N8.1 billion. AIICO Insurance GPW declined by 9.6 per cent to N17.8 billion from N19.7 billion.
Regency Alliance GPW declined by 9.1 per cent to N2 billion from N2.2 billion.
African Alliance GPW declined by 1.1 per cent to N1.84 billion from N1.86 billion.
However, two companies recorded growth in their GPW as Guinea Insurance recorded 33.8 per cent increase in GPW to N462.3 million from N345.5 million, while Custodian Investment recorded 18.7 per cent rise in GPW to N22.9 billion from N19.3 billion.
Some of the insurance firms had forcast better income in 2021 following relaxation of COVID-19 restrictions on businesses. But the Q2’21 results appear contrary to this expectation.
However, speaking on the industry performance, Managing Director of Boof Insurance Brokers, Mr. Olumide Fatogun, noted that the downturn in GPW does not portend doom, rather most policy holders have renewed their policies in the first quarter of the year.
Fatogun said: “The decline in GPW in the second and third quarters is only natural.
“This is usually the case as we usually witness a rush by policy holders to renew their policies in the first quarter of every year.
“However, policy renewals also pick up in the last quarter of the year; so there is no cause for alarm.”
Fatogun noted that the industry would most likely surpass the performance of the previous year on a moderate level.
He said: “It has been a fair performance considering the challenging economic environment.
“So looking at the industry as a whole, the sector is going to come out better by the end of the financial year.”