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Prestige Assurance Plc has returned to profit, driven by growth in revenue and moderation in claims costs even amid unfavorable underwriting environment, as the insurer continues to ensure appreciable returns to its shareholders.
There was marked improvement in all business segments, which means the insurer’s innovative products are making an inroad into the Nigerian market even as it benefitted from the reopening of the economy that strengthened commercial activities.
For the first six months through June 2022, Prestige Assurance posted profit after tax of N1.39 billion from a loss of N2.09 billion the previous year.
The stellar performance was buoyed by a reduction in claims, underwriting, and management expense ratio, but the combined ratio still exceeds the 100 percent threshold.
Claims expenses fell to 35.49 percent in June 2022 from 78.89 percent the previous year. Management expense ratio reduced to 40.33 percent in the period under review from 50.21 percent the previous year, according to MoneyCentral calculations.
The company paid N1.01 billion in claims to policyholders in 2022, which represents a 41.48 reduction from 2021’s N1.88 billion. It posted an underwriting profit of N231.14 million from a loss of N1.02 billion as at June 2021.
Interestingly, gross premium income increased by 22.03 percent to N5.87 billion as at June 2022 from N4.81 billion as at June 2021.
Net premium income followed the same growth trajectory as it was up 29.66 percent to N3.09 billion in the period under review from N2.39 billion the previous year.
The highlights of the company’s overall business performance reveals that gross premium written (GPW) from oil and gas portfolio, which make up 39.61 percent of total (GPW) , increased 20.88 percent to N3.28 billion.
Notably, the motor business or segment which saw GPW rise by 7.89 percent, is the most profitable as it posted underwriting profit of N409 million as at June 2022.
However, the majority of the business units capitulated to an unfavorable underwriting environment.
For instance, Fire segment recorded underwriting loss of N64.35 million; Accident, -N198.36 million; Aviation, -N40.36 million, Engineering, -N18.24 million.
Marine, Oil and Gas, and Agric bucked the trend as they recorded underwriting profit of N56.89 million, N85.30 million and N3.20 million respectively.
The insurer’s investment income which added impetus to profit surged by 1,195 percent to N2.48 billion.
The investment income was buoyed by the dividend income of N1.5 billion received from Stanbic IBTC Pension Managers Ltd.