Guinea Insurance Plc has posted a loss to end 2022 financial year, brought on by deteriorating underwriting performance as the insurer spent more on management expenses to generate premium income that is receding.
For the year ended December 2022, Guinea Insurance posted a loss after tax of N23.15 million from a profit position of N745.13 million the previous year.
Gross premium income dipped by 33.33 percent to N1.40 billion in December 2022 from N2.10 billion the previous year.
Net premium income (NPI) was down by 42.34 percent to N950.35 million in the period under review from N1.64 billion as at December 2021.
It is important to note that the firm is underachieving because of its inability to introduce innovative products into the market, stiff competition, as it continues to pay more in claims than the premium it generates.
The company spends its way into the future as management expenses increased to 90.10 percent in the period under review from 46.50 percent the previous year, according to MoneyCentral calculations.
Combined ratio deteriorated to 142.70 percent in December 2022 from 70.80 percent as at December 2021.
The combined ratio is a measure of profitability used by an insurance company to gauge how well it is performing in its daily operations. The combined ratio is typically expressed as a percentage.
A ratio below 100 percent indicates that the company is making an underwriting profit, while a ratio above 100 percent means that it is paying out more money in claims that it is receiving from premiums.
Many insurance companies believe that the combined ratio is the best way to measure success because it does not include investment income and only includes profit earned through efficient management.
Guinea Insurance posted a negative real underwriting return of N405.84 million as at December 2022 from a positive figure of N481.25 million the previous year.