Leadway Assurance remains the largest insurer by total asset in Africa’s largest economy, as it has a solid balance sheet to undertake big ticket deals needed to bolster earnings.
Leadway’s total asset hit N525.28 billion in December 2020, and that is double the next on the list which is AIICO Insurance’s total asset of N208.56 billion as at June 2021; Custodian Investment, (N173.07 billion) ; AXA Mansard, (N102.89 billion); Mutual Benefit Assurance, (N79.42 billion); Cornerstone, (N46.25 billion); Coronation Insurance, (N41.42 billion); Linkage Assurance, (N35.71 billion) Lasaco Assurance, (N26.38 billion); Prestige Assurance, (N19.42 billion); Consolidated Hallmark, N16.33 billion); Regency, (N13.35 billion),and Varitas, (N13.33 billion).
Leadway Assurance’s financial assets at fair value, which make up 61.33 percent of total assets, were up 35.07 percent to N322.05 billion in December 2020 from N238.42 billion the previous year.
It continues to be well capitalised relative to risks taken, maintaining comprehensive solvency ratios above 900 percent as at year end 2020.
Despite the low yield environment and the coronavirus pandemic that crippled the economy across the globe, Leadway Assurance’s solvency ratio increased to 978 percent in December 2020 from 439 percent as at December 2019.
The benchmark ratio for most countries is 100 percent but in India the Regulatory and Development Authority or IRDAI expects insurance companies to maintain a solvency ratio of 150 percent.
The improvement in solvency ratios for Leadway Assurance reflects the ongoing product shift toward more profitable protection-type products, as well as slower declines in the reserving rate leading to more available capital, and higher investment income supporting earnings.
Since the insurer is well capitalized, it is in a position to weather macroeconomic headwinds just as it surmounted the Covid-19 crisis that tipped the country into its second recession in five years.
Leadway Assurance’s total admissible asset of N507.71 billion as at December 2020 exceeded admissible liabilities of N453.38 billion, which led to excess funds of N54.32 billion.
In the wake of the coronavirus pandemic, so many questions have been asked about the solvency position of insurance companies.
There were fears that spiraling mortality rates and claims related to event cancellation would undermine earning to the extent that jeopardized the going concerns of some entities.