L-R :Group Managing Director/CEO, NEM Insurance Plc, Mr. Tope Smart; Chairman Board, Dr. Fidelis Ayebae, and Company Secretary, Mrs. Olajumoke Philip-Akede, during the company’s 51st annual general meeting held in Lagos today.
Bisi Bamishe
Director, NEM Insurance Plc, Mrs. Joy Teluwo; Group Managing Director/CEO, Mr. Tope Smart; Chairman Board, Dr. Fidelis Ayebae, and Executive Director, Marketing, Mr. Andrew Ikekhua, during the company’s 51st annual general meeting held in Lagos yesterdayNEM Insurance Plc generated N22billion gross premium income last year as against N19.8 billion generated in the preceding year 2019, representing an increase of 12%. The Net Premium earned during the period under review was N15.8 billion and 25% increase over the preceding period of 2019 which recorded N12.6 billion.
This was made known by the chairman of NEM, Dr Fidelis Ayebae at the company’s 51st annual general meeting held in Lagos yesterday, where the Board recommended a dividend of 9 kobo per ordinary share for the shareholders.
According to him, while the Group’s Profit After Tax (PAT) for the preceding period was N2.4 billion, the sum of N5.08billion was recorded in the reporting period, representing an increase of 112%. The Parent Company also recorded an increase of 113% PAT over the preceding period. That is, N2.4 billion was generated in 2019 against N5.08billion in 2020.
“As at the end of the reporting period we have recapitalized up to 5.016 billion, bonus shares were issued to existing shareholders in proportion of 9 for 10, this was approved at the EGM in 2020. It should be noted that before the end of year 2021 we shall conclude the second phase of the recapitalization to meet up with the NAICOM requirement of N10 billion in the (General Business) category”, he added.
Though the interest rate in commercial paper crashed, the company’s management was proactive enough to take advantage of other investment opportunities to generate an income on investment of N1.004billion as against the previous income on investment in 2019 which was N878.2 million. This resulted in increase of about 14.3%.
While a Gross Claim of N8.4 billion was incurred by NEM in 2020, that of 2019 was N7.3 billion, representing an increase of 15% . In the same vein, the Net Claims expenses of N6.05 billion incurred in 2020 was 53% higher than that of the preceding period which recorded N3.9billion. The Net Claims ratio for the period under review was 27% as against that of 2019 that was 21%.
In his remark, the Group Managing Director, Mr Tope Smart said that despite the difficult business terrain of 2020, the company showed resilience and was able to post impressive results.
“At the beginning of year 2020, global economy had just recorded its 10th straight uninterrupted growth and economists had expected this trend to continue for years ahead but within two months those expectations were shattered due to the novel corona virus that was first discovered in China in December 2019”, he stated.
Smart said further that, “with regard to the issue of recapitalization, the National Insurance Commission (NAICOM) having looked at the impact of COVID-19 on the recapitalization of Insurance Industry decided to break the exercise into two phases. Insurance companies were required to meet up with 50% of their required capital by 31st December, 2020 while full compliance was scheduled to be attained by 30th September, 2021. We met the first phase by capitalizing our share premium and part of our retained earnings to bring our Paid-Up Capital to N5,016,477,000. This was achieved through the issuance of bonus shares to all existing shareholders as at middle of December. Suffice to say that the recapitalization exercise has now been suspended as a result of court injunction.”
