In a remarkable demonstration of resilience amidst economic uncertainties, 17 insurance companies listed on the Nigerian Exchange Limited (NGX) collectively recorded a profit before tax (PBT) surge of 238%, reaching N98.33 billion in 2023. This significant increase reflects a substantial jump from the N29.07 billion reported in the previous financial year.
Despite the impressive performance, the delay in the release of audited financial statements for the period ended December 31, 2023, has impacted dividend payouts to shareholders and adversely affected the insurance index performance on the NGX. Many insurance companies attribute this delay to challenges associated with the implementation of the International Financial Reporting Standard 17, which necessitates various changes in disclosure methods.
The National Insurance Commission (NAICOM) has granted a general extension for the submission of audited accounts on behalf of the insurance companies, acknowledging the complexities involved.
The NGX Insurance Index has experienced a decline Month-till-Date (MtD), falling to 5.99% as of April 19, 2024, primarily due to significant profit-taking by dividend-paying insurance companies.
Noteworthy among the firms, NEM Insurance, Cornerstone Insurance, and Axamansard Insurance Plc reported substantial increases in PBT, accompanied by significant growth in gross written premiums.
NEM Insurance posted a PBT of N20.79 billion in 2023, a remarkable 252% increase from N5.9 billion in 2022. Cornerstone Insurance recorded a PBT of N18.05 billion, marking a 518% growth from N2.92 billion in the previous year. Similarly, Axamansard Insurance declared a PBT of N17.9 billion in 2023, representing a remarkable 402% increase from N3.6 billion in 2022.
Despite the prevailing macroeconomic challenges, these 17 insurance companies collectively declared a profit of N84.11 billion in 2023, marking a significant 216% increase compared to N26.63 billion in 2022.
In terms of profit after tax, NEM Insurance led the pack with N18.5 billion in 2023, followed by Cornerstone Insurance with N15.7 billion.
Industry experts commend the resilience and achievements of these insurance companies amidst a challenging economic landscape. They emphasize the sector’s potential for growth and innovation, particularly in addressing market dynamics and increasing awareness and accessibility.
While the insurance sector continues to face penetration challenges, companies are introducing innovative products and services to drive top-line growth and enhance customer experience.
With the number of licensed insurance companies in Nigeria reaching 67, according to the latest figures from NAICOM, the sector’s contribution to the nation’s real GDP has witnessed significant growth, further underscoring its importance in the country’s economic landscape.
