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Lasaco Insurance Nigeria Plc’s net income has surged in the first quarter of the year despite a tough and unpredictable operating environment, thanks to a good underwriting performance.
For the first three months through March 2018, the insurer’s net income spiked by 55.70 percent to N190.36 million from N122.26 million as at March 2017
The growth in profit was largely driven by an efficient underwriting performance as evidenced in an efficient underwriting performance and improved efficiency ratios.
Underwriting profit surged by 128.65 percent to N563.92 million in the period under review from N246.80 million the previous year.
Lasaco is profitable and there are no threats to its going concerns as combined ratio of fell to 56.61 percent in the period under review from 107.91 percent the previous year.
Despite the challenges inhibiting the growth of insurance firms in Africa’s most populous nation, Lasaco’s gross premium income increased by 23.10 percent to N3.73 billion as at December 2017 while gross premium written (GPW) was up 5.50 percent to N2.11 billon the same period.
However, a breakdown of the component of gross premium income shows revenue from motor business fell by 10.44 percent to N99.10 million in the period under review as against N110.66 million the previous year.
The analysis shows revenue form motor business make up just 2.60 percent of the total gross premium of N3.73 billon as at December 2018.
Stakeholders have bemoaned the rates charged by operators in the industry for third part vehicle insurance.
Firms still charge N5000 for third party motor insurance, an amount that is abysmally poor and unrealistic in the light of inflationary period.
The rates should be N50,000. I got my 1st car in the late seventies for N3000, according to peter Irene, managing director of CEO of International Energy of Nigeria (IEE).
Irene added that he wondered why third party should be N3000 and that insurers could find it practically difficult to record huge premium with such rates.
Only 36 percent of vehicle plying Nigeria’s roads are currently insured.
Only about 4.5 million vehicles out of 12.5 million plying Nigeria’s roads are registered on the Nigerian Insurance Industry Database, NIID, which captures all legitimately insured vehicles in Nigeria, according to Chairman of Nigerian Insurers Association, NIA, Eddie Efekoha
This means only 36 percent of vehicle plying Nigeria’s roads are insured as most are fake insurance.
Analysts are of the view that fake document are common in other states as compliance remains weak.
Further analysis of the financial statement shows reinsurance assets increased by 33.70 percent to N2.38 billion as at March 2018 from N1.78 billion.
Insurance liabilities were up 25.86 percent to N6.52 billion in the period under review as against N5.18 billion the previous year.
BALA AUGIE
