NEM Insurance explains drop in investment, gross earnings
NEM insurance plc, has explained that its decrease in gross earnings for the 2016 financial year was due to merger of its Ghana operations.
The company’s Chairman, Dr. Fidelis Ayebae , revealed during his company’s 47th Annual General Meeting held in Ibadan, Oyo State.
He said that following the directive of the National Insurance Commission, Ghana, to increase the share base of insurance companies from $1 million to $5m, we decided to merge our operations with Regency Alliance Ghana Ltd.
The new name of the merged entity is RegencyNem Insurance Ghana Ltd. As a result of the merger, the status of NEM Insurance Ghana Ltd has changed from being a subsidiary to an Associate as our stake in the company is 40percent.
The development, he said, resulted into a decrease of 1.3per cent in Gross Premium over the previous period for the Group. The absolute figure was N10.8 billion in 2016 as against N10.9bn in 2015.
He added that the parent company recorded an increase of 4 per cent over the previous year. The sum of N10.8bn was achieved in 2016; while in 2015 it was N10.3bn.
He also noted that there was a notable improvement in the company’s claim experience during the period under review.
The chairman said, “The low interest rate as well as the inability of MTN to pay dividend as at when due because of the issue they had with the NCC, investment income, decreased by 35.7% for the group and 29.1% for the Parent Company.
While the Group generated an Investment Income of N479.5million during the year under review, the parent company also generated N479.5 million. In 2015 the income was N746.2m and N676.4m, respectively.”
He said that the company’s Profit before Tax (PBT) went up by 258.3 per cent and 290.8 per cent for the group and parent company respectively.
The group PBT rose in 2016 rose from N598.8m in the previous year of 2015 to N2.14bn at the end of 2016, while the Parent Company BPT rose from N559.4m In 2015 to N2.19bn in the period under review.
According to him claims expenses incurred by the group and parent Company was N2.67bn during the reporting year, an improvement of 32.6 per cent and 29.7 per cent, respectively.
He said “in the previous year the absolute figures were N3.96bn and N3.8bn respectively. Gross Claims ratio was 37.7per cent for the group and parent company, while that of the preceding year was 43.9per cent and 43.3per cent respectively. The Net Claims ratio was 31.4per cent for the group and parent company, while that of the previous year was 46.3per cent and 46.6per cent respectively.
He added that “the Financial Assets for the group and parent company for the year under review improved by 8.5 per cent and 17.9per cent respectively, over that of the preceding year. While the Total Assets and Total Equity of the group improved by 16.1% and 19.4% respectively, those of the parent company improved by 20.2per cent and 19.7per cent respectively.”
Bonny Amadi
