A sharp drop in premium income has tipped Equity Assurance Plc in a loss position as the Nigerian insurer continues to introduce new products to bolster revenue.
For the first nine months through September 2017, Equity Assurance recorded a loss after tax of N286.33 million, which represents an 86.54 per cent drop from the N2.0 billion loss it recorded last year.
The loss was due to a decline in the top line as the insurer operates in a volatile and tough operating environment.
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Gross premium is written (GPW), gross premium income (GPI) and Net premium income (NPI) fell by 36.18 per cent, 34.50 per cent and 34.45 per cent to N2.57 billion, N2.33 billion and N1.75 billion respectively.
The Nigerian insurer has launched innovative and market penetrating products as it seeks ways of underpinning premium income and maximizing shareholders’ wealth.
Equity Assurance has launched a mobile (USSD) Insurance solution, a self-service solution which enables car owners/users to purchase authentic third-party auto insurance with the use of their mobile phones in less than five minutes.
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The firm has witnessed a surge in the purchase of its insurance products since testing the application with a few selected customers, garnering a lot of very positive feedback from the customers and organizations that are looking to partner. I can confidently say that Equity Assurance Plc is on the verge of revolutionizing the insurance marketplace in Africa within the next few years, according to Moruf Apampa, managing director and chief executive officer of the firm.
While Equity Assurance recorded a loss in the period under review, it is efficient and there are no threats to underwriting performance as combined ratios (CR) are lower than the 100 per cent threshold.
The insurer has CR fell to 69.15 per cent in September 2017 as against 74.16 per cent as of September 2016.
Underwriting profits were down by 25.19 per cent to N642.66 million in the period under review as against N868.15 million the previous year.
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Net claims expenses were down 41.24 per cent to N719.22 million in the period under review, due to a 169.10 per cent slump in claims expenses recovered from reinsurers.
Claims ratio dipped to 41.01 per cent in September 2017 as against 46.74 per cent the previous year.
Equity Assurance is financially stable and its liquidity position is not threatened as solvency margin ratio stood at 225.17 per cent as at September 2017.
This means the insurer’s total assets can cover its total liabilities.
However, the insurer has negative accumulated losses of N5.44 billion in the period under review, validating its recurring losses.
Our Reporter
