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AXA Mansard Plc has realised N14.72 billion premium income from oil and gas segment as at December 2022, even as net income slumped on the back of rising expenses and slow growth in revenue.
Premium income from oil and gas stood at N14.74 billion as at December 2021, which is nearly flattish.
Analysts say despite the local content for oil and gas, insurers still lag their peers in underwriting risk in the sector.
The majority of insurers do not have the capacity or capital to underwrite big ticket transactions that are needed to bolster earnings as the industry contributes less than 1 percent to the economy.
The federal government had set a target of 70 per cent local content for underwriting of oil and gas risks, implying that 70 percent of all insurance risks associated with oil and gas business including prospecting, exploration, drilling, constructions, shipping, distribution, marketing, and transportation are to be insured in Nigeria with registered Nigerian insurance companies.
AXA Mansard Plc’s gross premium income was up 24.62 percent to N69.44 billion in 2022 from N55.72 billion as at December 2021.
A breakdown of the top line figures shows premium income from Non-Life segment (Group Life and Individual Life) dipped by 0.38 percent to N27.42 billion in the period under review from N28.30 billion the previous year. Premium income from the Life Business was up 49.51 percent to N13.80 billion in 2022 from N9.23 billion the previous year.
It realised N27.47 billion from the Health Maintenance Organisation (HMO), which is 21.28 percent higher than 2021’s N22.65 billion.
As a result of rising inflation that ballooned the replacement cost of assets, the company’s claims expenses were up 36.09 percent to N33.09 billion as at December 2022.
Claims expenses moved to 71.25 percent in 2022 from 65.47 percent as at December 2021.
The company’s combined ratio at 106.10 percent as computed by MoneyCentral exceeds the 100 percent generally accepted benchmark as it continues to struggle with deteriorating underwriting performance.
Despite an uptick in investment income, profit after tax (PAT) fell by 40.16 percent to N2.23 billion as at December 2022 from N3.73 billion the previous year.
Investment income for most insurers had risen last year as rising bond yields boost returns that they had invested in fixed income securities.
And it appears firms will be enjoying juicy yields this year since the central bank is expected to remain hawkish in its fight against red-hot inflation.