Nem Insurance post N12.6b earnings in FY2019

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Nem Insurance Plc has announced a gross premium of N19.8 billion and dividend payment of 15k per share for the financial year ended Dec. 31, 2019.

Addressing the shareholders at its 2019 Annual General Meeting (AGM) by proxy held in Lagos, Fidelis Ayebae, Nem Insurance Chairman, said gross premium during the period stood at N19.8 billion compared with N15.04 billion achieved in 2018, an increase of 31.3 percent.

Ayebae said net premium earned during the period stood at N12.6 billion, indicating an increase of 18 percent when compared with N10.7 billion posted in the comparative period of 2018. He stated that the company’s investment income stood at N878.2 million compared with N952.8 million achieved in 2018, a decrease of 7.8 percent due to the crash in interest rate.

Ayebae noted that gross claim of N7.4 billion was incurred in 2019 in contrast with N6.01 billion in 2018, representing an increase of 22.7 percent.

“Since the outbreak of the novel strain of Coronavirus, specifically identified as “COVID-19” in December 2019, governments worldwide have enacted emergency measures to combat the spread of the virus. NEM is also actively assessing and responding where possible,  to its potential impact on the company’s business. The focus has been on the safety of our personnel, ensuring the continuity of access to our products by our clients and also efficient service delivery.

“As the situation continues to be very dynamic, the company has been working diligently to assess the potential risks posed by COVID-19 to its business on an ongoing basis and to realign its strategies accordingly,” he said.

Also speaking, Tope Smart, the company’s Group Managing Director, said shareholders fund increased to N14.1 billion from N12.4 billion recorded in 2018. Smart said that net claims paid during the period rose by 54 percent to N3.9 billion from N2.5 billion in the corresponding period of 2018.

He explained that the huge claims paid during the period had a negative impact on its bottom line as profit before tax stood at N1.9 billion from N2.6 billion in 2018, a decrease of 29 percent.

“However, profit after tax increased to N2.4 billion from N2 billion, an increase of 18 percent due to deferred tax assets. From our associate in Ghana, we achieved one percent increase in profit from N21.2 million in 2018 to N21.4 million in 2019. We are confident of improving on this next year,” he added.

Smart, who is also the Chief Executive Officer, said the company would pay a dividend of 15k per share to its shareholders during the period under review.

Speaking on recapitalization exercise, Smart assured the shareholders that the company was working very hard to ensure compliance before the due date.

“During the year, our regulator, National Insurance Commission (NAICOM) increased the minimum paid-up capital of all Insurance and Reinsurance companies and were initially given up to June 30, 2020, to comply.

“This period was subsequently changed to December 31, 2020, due to pressure from operators. We are working hard to ensure compliance before the due date. Our associate in Ghana, RegencyNEM Insurance is equally going through a recapitalization process as directed by the National Insurance Commission, Ghana.

“However, they have up to June 2021 to comply and we are working toward complying with this new capital regime also,” he said.