Union Assurance Plc restructuring exercise carried out with a view to tapping into the Nigerian market that crave for insurance cover has paid off as the company’s net premium income hit N3.12 billion.
For the year ended December 2014, the company’s gross premium written increased by 6.54 percent to N3.91 billion from N3.67 billion in the same period of the corresponding year 2013.
Union Assurance took a one-off charge of N1.1 billion to pay severance package to 153 staff that was disengaged as a result of the restructuring exercise.
In order to strengthen the company’s operations, make it a force to reckon with in the Nigeria insurance industry, Greenoaks Global Holdings Limited, injected $21.80 million (N3.7 billion) into Union Assurance balance sheet.
Greenoaks Global Holdings Limited, last year, successfully consummated the acquisition of Union Assurance Company PLC from Union Bank of Nigeria PLC for an agreed sum of N7 billion.
The additional capital injection ensures that the Company is operating beyond the stipulated solvency margin by NAICOM in addition to its being better positioned to effectively execute improved and impactful underwriting services, according to Segun Adesanya, the Chief Financial Officer (CFO) of Union Assurance, in a statement made in April 27.
Union Assurance is intensifying paying claims to clients as its claims ratio was 38.61 percent one of the highest in the industry.
Claims expenses in the period under review was N1.51 billion, 7.85 percent increase from N1.4 billion the corresponding period.
The company’s total assets spiked by 36.97 percent to N12.30 billion in 2014 compared with N9.98 billion the previous year. Shareholder’s fund grew by 62.26 percent to N5.29 billion in 2014 as against N3.26 billion.
Insurance business in Africa largest economy are in dare need of strategic innovations given the sector’s low premium penetration which is abysmally poor when compared with some countries in Sub Sahara Africa.
The industry contributed less than one percent to an economy of $510 billion (80.22 trillion).
However, analysts say a young and growing population of approximately 170 million like Nigeria portends opportunities for insurers to tap into and increase premium penetration. The recent advancement in technology such as the mobile devises if taken advantage of will help deepen insurance penetration.
Union Assurance reinsurance expense was down by 14.70 percent to N827.27 million in 2014 from N969.87 million the previous year. Underwriting expenses jumped by 14 percent to N1.71 billion in 2014 as against N1.50 billion in 2013.
BALA AUGIE
