Companies in the insurance sector have been angling to meet the industry gross premium target of N1.1 trillion set by the Nigeria Insurance Commission (NAICOM), representing about 2.5 percent of the Nigeria’s 2012 nominal GDP of N43 trillion.
The N1.1 trillion targeted by 2012 was a little ambitious so NAICOM has been forced to shift the projection to 2017.
We have decided to analyse the nine months through September 2013 financial results of 12 listed insurance companies with a view to ascertaining whether they are on the right trajectory of meeting the aforementioned benchmark.
FIGURE 1: Gross Premium Earned 9M 2013
| COMPANY |
2013 |
2012 |
% ^/v | MARKET SHARE |
|
N’000 |
N’000 |
|||
| PRESTIGE |
2,933,259 |
3,311,377 |
-11% |
4% |
| EQUITY |
2,023,133 |
1,789,171 |
13% |
3% |
| CONTINENTAL |
9,634,226 |
8,254,094 |
17% |
12% |
| AIICO |
14,676,332 |
12,427,081 |
18% |
19% |
| CORNER STONE |
3,556,552 |
3,356,324 |
6% |
5% |
| SOVERIGN TRUST |
4,883,587 |
6,665,318 |
-27% |
6% |
| REGENANCY |
2,237,500 |
1,778,899 |
26% |
3% |
| MANSARD |
9,167,415 |
8,470,734 |
8% |
12% |
| CUSTODIAN & ALLIED |
19,876,820 |
9,494,518 |
109% |
25% |
| UNITYKAPITAL |
2,061,843 |
1,659,595 |
24% |
3% |
| OASIS |
1,152,603 |
1,413,780 |
-18% |
1% |
| N.E.M |
6,334,970 |
7,811,027 |
-19% |
8% |
| TOTAL |
78,538,240 |
66,431,918 |
18% |
100% |
Source: BusinessDay Research, NSE
The firms are follows: Prestige Assurance Plc, Equity Assurance Plc, Continental Re-Insurance Plc, Aiico Insurance Plc, Corner Stone Insurance Plc, Sovereign Trust Insurance Plc, Regency Assurance Plc, Mansard Insurance Plc, Custodian and Allied Plc, Unitykapital Assurance Plc Oasis Insurance Plc, and NEM Insurance Nig Plc.
- The twelve firms collectively made total gross premium earned of N78.54 billion for the Nine Months through September 2013, an increase of 18 percent from N66.43 billion recorded in the corresponding period Q3 2012.
- All the companies had higher gross premiums earned (GPE), for the nine-month period except; Prestige Assurance, Sovereign Trust Insurance, Oasis, and NEM Insurance whose GPE shrank by 11 percent to N2.93 billion, 27 percent to N4.88 billion, 18 percent to N1.15 billion, and 19 percent to N6.33 billion respectively.
- As a percentage of the total premium of N78.54 billion, Custodian and Allied, led the pack with 25 percent (N19.88 billion); followed by Aiico Insurance, with 19 percent (N14.66 billion); while Continental and Mansard Insurance had 12 percent each.
- The Insurance Company with the highest market capitalisation in Nigeria is Mansard Insurance Plc, with a market capitalisation of N25 billion and a market price per share of 250k as at 2nd January 2014.
- The least capitalized are Equity, Sovereign, Regency, UnityKapital ,and Oasis Insurance with a market capitalisation of N4.42 billion,N3.43 billion,N3.33 billion,N6.93 billion, and N4.0 billion respectively; Their market price stood at 50k a piece.
- Custodian and Allied Insurance is the most improved among these firms as it grew its gross premium earned by 109 percent to N19.87 billion and Market price increased by 69 percent to close at 218k in the past year.
- Gross annual Insurance premiums as a percentage of GDP are lower in Nigeria than in Kenya and South Africa, suggesting huge upside potentials for Insurance companies with a market of over 160 million people.
- However that potential is grossly untapped. For instance the 12 insurance firms analysed had a combined market capitalisation of N93.1 billion (Jan 2). This is lower than the market cap. of one second-tier Nigerian lender (Diamond Bank), with a market cap. of N108.5 billion.
PATRICK ATUANYA & BALA AUGIE
