31.2 C
Monday, March 27, 2023

Leadway Assurance Pays N3.50 billion Dividend

Must read

Listen now
- Advertisement -
- Advertisement -

Leadway Assurance Company Limited has rewarded owners of the business out of distributable profit with the payment of dividend, as the insurer continues to surmount macroeconomic headwinds while at the same time delivering higher returns to shareholders.

In fulfillment of consistent return on shareholders’ capital and equity investment, the Board of Directors recommended a cash payment of N3.50 billion, which translated to N0.35 per ordinary shares.

The insurer pursues a steady dividend policy that allures investors who crave for good investments to add to their portfolio.

It is important to note that the cash payment translates to a dividend payout of 35.05 percent, according to MoneyCentral.

The dividend payout ratio is the ratio of the total amount of dividends paid out to shareholders relative to the net income of the company. It is the percentage of earnings paid to shareholders via dividends.

The amount that is not paid to shareholders is retained by the company to pay off debt or to reinvest in core operations. It is sometimes simply referred to as simply the payout ratio.

Financial institutions such as banks and insurers adopt a conservative dividend policy as the regulator puts a limit to the amount of cash that they can distribute out of distributable profit so as to protect their capital.

During the coronavirus pandemic, the European Central Bank told lenders to skip dividend payment to shore up reserves as the world was at the verge of a recession.

Despite the challenging operating environment, Leadway Assurance posted pre-tax profit of N11.95 billion in 2021, and that represents a 4.73 percent increase from 2020’s N11.41 billion.

Leadway Assurance has the capacity to retain risk, and it can collect more premiums to invest, and there are no threats to going concerns.

Of course, the insurer is well capitalised as it was the first company to meet the new capital requirement by the regulator; it is the largest company by shareholders’ funds.

It has a total shareholders’ fund of N79.61 billion as at December 2021.

That compares to Custodian Investments, N63.38 billion; AIICO Insurance Plc, N37.85 billion; AXA Mansard, N30.50 billion; FBN Insurance Limited, N24.11 billion; NEM Insurance Plc, N22.83 billion; Coronation Insurance Plc, N22.51 billion; Linkage Assurance Plc, N23.43 billion, and Cornerstone Insurance Plc, N20 billion.

The shareholder also known as policy surplus is paramount in insurance because it shows the extent to which an insurer has the financial strength or arsenal to underwrite policies needed to spur earnings and pay claims.

Leadway Assurance has been making profit since it started operations and it has the capacity to dividend as retained earnings, which is the largest in the industry, increased by 18.63 percent to N35.20 billion as at December 2021.

- Advertisement -
- Advertisement -

More articles


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisement -

Latest article