Wapic Insurance Plc recorded huge drop in its underwriting profit from N1.5billion in 2015 to N381million in 2016.
Announcing the company’s financial performance for the period under review to shareholders at the companyâ€™s 58th annual general meeting, which held in Lagos recently, Wapic Insurance Chairman, Aigboje Aig-Imoukhuede, said the company had targeted a premium growth rate of 20percent for the period, but failed to achieve it owing to increase in claims rate.
He explained that the claims rate rose to N2.9billion in 2016 from N1billion in 2014 and N1.6billion in 2015.
This, he said, negatively affected underwriting profit of the company.
“This significant jump in underwriting expenses, negatively impacted underwriting profit, which closed at N381 millionâ€, he said.
The company also recorded a loss in its profit for the year 2016 as it declared a profit after tax of N586.1 million for the 2016 full year ended December 31 as against N1.3billion it achieved in 2015.
Similarly, profit before tax stood at N1.2billion compared with N1.7billion the company declared in the year 2015, indicating a decline by 28 percent.
During the period under review, the insurance firm used N4.2 billion as operating expenses in contrast to N3.5 billion it spent in the year ended December 31, 2015.
Aig-Imoukhuede said despite the shortfall in the targeted premium growth rate of the company, which he said was the first in three years, Wapic Insurance maintained its strong performance in investment area. He informed the shareholders that Wapic associate company, the Coronation Merchant Bank limited, during the period, delivered outstanding earnings growth adding that Wapic Insurance share of the bank’s profit, contributed strongly to the groupâ€™s profit before tax.
On the outlook of the company, Aig-Imoukhuede, emphasised on the relevance of the underwriting firm’s Ikoyi based new corporate office.
He said: “Our newly commissioned head office, signposts our vision of transforming and illuminating the Nigerian insurance sector. Your company has been graced by visits from leading figures in the private and public sector affording us valuable opportunities to strengthen our relationships and networks towards increased business.” On his part, the Managing Director and Chief Executive Officer of the Company, Adeyinka Adekoya, said despite the challenging macroeconomic situation in the country during the period, Wapic Insurance was able to deliver on its three key imperatives of sustaining capital strength, maintaining strong financial position and improving growth in market share.