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Universal Insurance in a growth spurt as earnings

By on May 10, 2015

spikeUniversal Insurance Plc is in a growth spurt as full year 2014 profit surges 1075 percent amid tough operating environment bedeviling firms in Africa largest economy Nigeria.

For the year ended December 2013, Universal Insurance profit after tax (PAT) surged by 1075 percent to N265.63 million from N22.66 million the same period of the corresponding year (FY) 2012.

Profit before tax followed the same growth trajectory as it spiked by 544.72 percent to N307.38 million compared with N47.72 million N47.72 billion in 2012.

Underwriting profit moved by 35.36 percent to N351.35 million in 2013 from N259.55 million as at December 2012.

The growth in profit is coming amid rising costs as despite a 40.32 percent increase in claims expenses though operating expenses reduced by 58.68 percent to N453.30 million from N635.65 million in 2012.

Universal Insurance underwriting capacity is efficient as net premium income (NPI) moved by 40.20 percent to N543.67 million in 2013 as against N387.76 million in 2012.

Gross premium written (GPW) jumped by 49.15 percent to N620.24 million in 2013 from N415.84 million in 2012, while gross premium earned (GPE) increased by 40.45 percent to N567.76 million.

While Universal Insurance performance was stellar, the industry’s less than 1 percent contribution to the Nigeria economy of $510 billion (N80.22 trillion) is abysmal compared with countries like South Africa and Kenya where insurance penetration is high.

Analysts identity challenges befalling firms operating in the industry as culture, general mind-set of people to insurance and lack of human capital, poor corporate governance issue, poor business infrastructure facilities and lack of awareness on the part of consumers on the uses and/sustainability of insurance products.

National insurance Commission is (NAICOM) has churned out policies to deepen insurance penetration in Nigeria. NAICOM has enforced rules requiring companies with at least five workers to provide life coverage. The regulator is also making property insurance mandatory in the nation of more than 170 million people.

Universal Insurance total assets increased by 3.17 percent to N13.33 billion in 2013 as against N12.92 billion in 2012.

The company was able to utilize shareholder’s resources in generating increased profit as its return on equity (ROE) moved to 2.54 percent in 2013 from 0.22 percent the previous year while the return on assets (ROA) moved to 2 percent compared with 0.17 percent as at December 2012.

Universal Insurance Plc provides insurance and financial services to commercial, institutional, and individual customers in Nigeria. The company offers mortgage services; and general insurance, such as motor, general accident, fire, engineering, and marine, as well as bonds, guarantees, indemnities.

The company’s share price closed at N0.50 on the Nigeria stock exchange while market capitalization was N8 billion.



[Business Day]