Niger Insurance Plc on Thursday announced that it achieved a modest operating profit of N593,808,000 in 2018.
The Chairman of the company, Mr Stephen Dike, made the disclosure during the presentation of the company’s Annual Report and Financial Statements of the year ended December 31,2018 at its 49th Annual General Meeting (AGM) in Lagos.
He said that the figure was an improvement, coming after the loss of N978,927,000 registered in 2017.
Dike said that the company’s Gross Premium Written in 2018 was N4,450,453,000, a decrease from N8,585,781,000 written in 2017.
He said the Gross Premium Income was N5,215,326,000, also a decrease from N7,316,049,000 reported in 2017.
According to him, the performance is below the insurance company’s target of achieving growth in excess of the rate of inflation.
Dike explained that the board of the company in 2017, as part of restructuring its assets to enhance liquidity, approved the sale of some real estate properties.
“However, the sale of these properties worth N6.387 billion was not concluded within the past two years, consequently, they were reclassified.
“The properties were valued at the lower of carrying and fair market value less cost of sale.
“Nonetheless, with the renewed support of reputable agents, the Management is optimistic that the sale will be concluded within the next financial year,” he said.
The Chairman said that following the National Insurance Commission (NAICOM) recent directive for insurance and reinsurance companies to recapitalise by June 2020, Niger Insurance, as most other insurance firms, was expected to shore up its capital to the tune of N15billion.
He said that the company had engaged Chapel Hill Denham and Mainstream Bank Capital Limited as financial advisers, to assist it in developing a viable strategic blueprint for the successful recapitalisation of the company.
Dike said Niger Insurance plc was exploring an optimal mix of funding options, including right issues, private placement, merger and or acquisition.
“The uncertainties in the global and domestic economies have introduced additional negative dimensions to the challenges facing insurance companies in Nigeria .
“These uncertainties and challenges have been further exacerbated by the recapitalisation order announced by NAICOM.
“We are judiciously and diligently working to meet the capital required for our company to continue to operate as Composite Insurance Company.
“The Board is in discussion with potential investors who will not only bring in capital but also technical expertise.
“We are also exploring capital restructuring through stock merge or reverse share split to create headroom for the recapitalisation, ” he said.
Dike thanked his colleagues on the Board for their commitment, cooperation and contribution, and also the loyal shareholders for keeping faith with the company through its difficult times.
In his report, the new Managing Director of the Insurance Company, Mr Edwin Igbiti, said that the 2018 Financial Year was very challenging for the Insurance industry.
He attributed this to shrinking of Federal and State Government revenues, high exchange rate, among others.
Igbiti, the immediate past MD of AIICO Insurance who assumed office at Niger Insurance in September, said that the high energy cost resulted in inflationary landscape and slowdown of business activities and commerce during the financial year.
He said that in spite of the economic headwinds and challenges in 2018, the company delivered a modest performance.
The managing director said this was so, with the overall result reflecting the company’s market challenges arising from under-reserving and the delayed resolution of legacy issues.
“With less than 1 per cent insurance penetration rate, the challenge before us is huge and the opportunities are equally enormous.
“I wake up each day motivated and convinced that we can reposition Niger to prominence and pride of place.
”It is my hope that we would be able to say in future that ‘At Niger Insurance plc, we did a great and amazing job.
“It is time we knuckle down and roll – up our sleeves to deliver the full potential and promise of Niger to this generation and subsequent ones,” he said.