Law Union and Rock’s grip on customers drives premium
Law Union and Rock Insurance Plc hold over consumers that crave for insurance products, drove third quarter premium income as investment income underpins profit.
For the nine months through September 2017, Law Union and Rock’s gross premium income (GPI) increased by 11.26 percent to N3.26 billion from 2.93billion September 2016.
The insurer attributed the growth in revenue to expansion in retail business as the company continues to introduce innovative products with a view to increasing the share of the Nigerian market.
“Basically, our retail line of business has helped us coupled with an improvement in the engineering line compared to last year,” said Jide Orimolade, managing director and Chief Executive Officer of Law Union Rock.
“We have three products on the pipeline and we are trying to get approval from the regulator before we launch them,” said Orimolade.
Law Union and Rock’s net income spiked by 18.28 percent to N618.68 million in the period under review; thanks to a 65.69 percent increase investment income; the Company’s shareholder’s fund surged by 23.73 percent to N6.21billion attributed to consistent earnings growth.
Insurers in Africa’s most populous nation and largest oil producer have seen investment income increase on the back of investment in government Treasury Bills (T-bills) and bonds.
Yields for the 364-day treasury bills at the last auction dropped to a 15-month low of 15.72 per cent, according to the Debt Management Office (DMO).
While Nigeria is largest economy in Africa, the country’s premium penetration is abysmally poor.
Out of Nigeria’s estimated population of two hundred million populations, and of ninety million adults, only two million people have one form of insurance cover or the other.
This explains why the sector’s contribution to GDP is less than 1 percent, lagging behind sub-Saharan countries like Kenya and South Africa.
Experts have attributed the poor contribution of the sector to the economy to apathy toward insurance, lack of proper regulation and weak consumer spending.
Further analysis of the financial statement of Law Union and Rock Insurance’s financial statement shows claims expenses remained flat at N611.05 million in the period under review.
The Nigerian insurer’s claims ratios increased to 32.62 percent in September 2017 from 30.56 percent the previous year. This means the company is spending more on claims to generate each unit of premium income.
Insurers have been booking huge claims expenses due to high industrial risk as claimant change has resulted in increased fire incidence.
Also, a lot of policyholders are demanding claims from their insurer. Analysts attribute this to increased awareness among these customers.
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