Leadway Assurance Limited showed it is still the most profitable and efficient insurer in Nigeria and met obligations to policy makers despite stuttering economic growth.
Profit surged by 49.66 percent to N9.19 billion as at December 2019 from N6.02 billion as at December 2018. The N9.19 billion in net income is equivalent to the bottom line of eight insurers combined.
The composite insurer has the lowest combined ratio in the industry, thanks to improved underwriting performance and better cost management.
Leadway Assurance has a combined ratio of 78.37 percent as at December 2019, which compares to NEM Insurance, (88.15 percent); Aiico Insurance, (99.43 percent); Sovereign Trust Insurance, Mutual Benefit, 110.15 (percent); Lasaco Insurance, (115.13 percent); Consolidated Hall Mark, (115.15 percent).
Other are: Royal Exchange Insurance, 118.15 percent; Law Union and Rock, (119.13 percent); Zenith General Insurance, (112.13 percent); Prestige Assurance, (126.12 percent); Wapic Insurance, (149.13 percent); Linkage Assurance, (152.16 percent), and Cornerstone (174.20 percent).
A combined ratio of less than 100 shows that an insurer is taking in more money from premiums than it’s paying on claims and overhead, indicating a profitable enterprise.
Conversely, a combined ratio of more than 100 shows that the insurer is paying more in claim losses and expenses than it’s collecting in premiums, and that’s typically bad news for a company’s long-term prospects.
A big fish in a small pound, Leadway Assurance’s N396.30 billion total assets (December 2019) is equivalent to combined asset bases of AIICO Insurance Plc, Custodian Investment, and AXA Mansard Insurance Plc.
The major drivers of the insurers’ profit are sizable increase in investment income, market penetrating product, and cost control mechanism.
Despite a protracted economic downturn and inherent uncertainties hobbling the growth of the insurance industry, Leadway Assurance has been honoring obligation to policy holders.
Total claims expenses were up 11.78 percent to N38.46 billion as at December 2019 from N34.41 billion the previous year. Claims ratio increased to 54.23 percent in December 2019 as against 48.13 percent the previous year.
“We continue to demonstrate our commitment to our loyal customers through our customer services delivery channels, underpinned by a motivated team, outstanding brokers and agents, innovations and technology,” said Tunde Hassan-Odukale, managing director/CEO of the company.
“I am proud that we have transmitted the principle of devoted customer-focus into a five-decade legacy that would continue to be the compass with which we steer the next half-century of operational excellence,” said Odukale.
While other insurers are struggling with huge operating expenses that hinder them from delivering higher returns, Leadway Assurance is spending less on cost to generate premium income.
Management expense ratio reduced to 12.67 percent in December 2019 from 14.76 percent the previous year. Leadway Assurance has the lowest ratio in the industry.
The prudence of the company’s Management over the years has prepared us for the regulations of today where we are in a good position to comply with the minimum share capital requirement without the exigency for any call on shareholders, according to General Martin Luther Agwai (CFR), Chairman of the company.
“I am also happy to inform you that the regulator has approved the company’s recapitalization plan and extended full compliance timeline till 31st December,” said Agwai.
Leadway Assurance is one of Nigeria’s foremost insurance service companies with a reputation for service efficiency and customer reliability. The organization is committed to bridging the financial protection gap and increasing the rate of insurance penetration in Nigeria.