Equity Assurance Plc for the first nine months through September 2015 posted a loss after tax of N543.03 million, which eclipsed the loss of N209.24 million recorded last year.
The company’s gross premium written dropped by 13.84 percent to N3.36 billion in 2015 from N3.90 billion last year.
Net premium written fell by 0.86 percent to N3.45 billion in 2015 as against N3.48 billion last year.Net premiums earned dipped by 2.40 percent to N2.44 billion compared with N2.50 billion the preceding year.
Equity Assurance weak top lines in the period under review accentuate the low premium penetration of insurers in Africa largest economy where poverty, literacy, superstitious beliefs and lack of trust continues to inhibit growth of the sector.
Lack of knowledge about the importance of a cover is stunting growth of insurers as most people see life insurance as abominable and they shudder at the mention of the package.
These challenges showed face in the last rebased GDP as the insurance sector contributed less than one percent to an economy of $500 billion (N100 trillion).
There is a perception in Nigeria that insurance companies are fraudulent and will not pay up when there is a claim, according to an actuary who doesn’t want his mentioned because of the sensitivity of the matter.
“Also the fact that in Nigeria we are relatively poor means people will not spend money on insurance when they don’t have money to eat food. They will rather spend the money on food or commodities than to spend it on insurance,” he said.
Analysts say more people may be discouraged from buying insurance as a drop in oil price by more than 70 percent to $36 and rising inflation have both combined to dampen consumer spending.
Despite the economic doldrums and inherent challenges, Equity Assurance has strong underwriting performance as its combined ratios of 56.55 percent are lower than the 100 percent threshold. This figure is also lower than the 57.83 percent recorded last year.
Equity Assurance share price closed at N0.50 on the floor of the exchange while market capitalization was N4.42 billion.
