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Despite rising inflation that has ballooned claims cost for operators in the industry, Mutual Benefit Assurance Plc has recorded an uptick in profit supported by revenue growth that validates the acceptability of the insurer’s products.
The Nigerian underwriter has reported net income of N5 billion as at September 2o23, which represents a 38.88 percent from 2022’s N3.60 billion.
The growth in profit was underpinned by an improvement at the top lines (sales) as there has been increase across all business segment, but there are indications the company might hike premium rates at the next renewals to compensate for price rises.
Gross premium written (GPW) was up 30.42 percent to N34.34 billion in September 2o23 from N26.33 billion as at September 2022.
Gross premium income (GPI) rose by 17.73 percent to N29.35 billion in September 2o23 from N24.93 billion the previous year.
Net premium income (NPI) followed the same growth trajectory as it went up 17.71 percent to N26.65 billion in September 2023 from N21.79 billion the previous year.
However, Mutual Benefit was exposed to mounting obligations to policyholders due to the impact of rising inflation on the replacement costs of assets which led to deteriorating underwriting results.
For instance, the combined ratio deteriorated to 100.08 percent in September 2023 from 90.71 percent the previous year.
The combined ratio is a measure of profitability used by an insurance company to gauge how well it is performing in its daily operations. 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.
Claims ratio increased to 49.21 percent in September 2023 from 42.25 percent as at September 2022.
Mutual Benefit paid N12.63 billion in claims to policyholders in the first nine months, which is 37.28 percent higher than 2022’s N9.20 billion.
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