Wapic insurance third quarter premium growth has validated AM Best ‘B’ ratings that the Nigeria insurer is gaining more and more momentum amid uncertainties bedevilling most firms in Africa’s largest economy.
The company’s enhanced underwriting capacity, financial strength and impetus means the shareholders are in an upside position as investors appetite for the company’s stock will spike.
For the first nine months through September 2015, Wapic’s Net premium income increased by 37.95 percent to N2.95 billion from N2.14 billion last year. Gross premium come moved by 24.28 percent to N4.38 billion.
The company’s combined ratio (CR) was 50.57 percent, up from 39.71 percent recorded last year, based on Business Day’s calculations.
The combined ratio measures whether the insurance company is earning more revenues from its collected premiums relative to the claims it pays out.
A combined ratio of less than 100 percent indicates underwriting profitability, while anything over 100 indicates an underwriting loss.
Wapic’s enhanced underwriting capacity has culminated in real underwriting results of N1.45 billion, a figure that shows the Nigeria insurer is on a growth trajectory.
An industry player who doesn’t want his named mentioned attributes the upside position of Wapic to its savvy management and directors who have re-positioned the company for better performance.
The company has one of the highest solvency ratios in the Nigerian insurance industry as well as one of the highest total asset positions.
Further analysis of Wapic’s financial statements shows loss ratios otherwise known as claims ratio increased to 33.63 percent in 2015 from 21.63 percent the previous year.
Total net claims paid surged by 114 percent to N993.86 million.
This means out of every N100 the company collects in premium, it pays N33 as claims.
Further analysis of Wapic’s financial statement shows underwriting expenses were up by 13.94 percent to N959.10 million as against N841.76 million last year. Operating expenses moved by 30.58 percent to N2.69 billion in 2015 compared with N2.06 billion the previous year.
Underwriting profit jumped by 21.30 percent to N1.31 billion in the period under review compared with N1.08 billion last year. Net income reduced by 27.22 percent to N33.63 million in 2015 as against N123.51 million last year.
Wapic total assets increased by 8.43 percent to N23.91 billion in 2015 as against N22.05 billion in 2014. Shareholder’s fund moved by 5.14 percent to N14.93 billion as against N14.20 billion last year
Wapic share price closed at N0.50 on the floor of the exchange while market capitalization was N6.69 billion.
DOZIE IFEBI
