Linkage Assurance Plc, one of the largest underwriting firms in Africa’s most populous nation, has posted a net income of N3.40 billion for the third quarter of 2023, which is 63.46 percent higher than 2022’s N2.08 billion.
A solid growth in premium income (sales) and a foreign exchange gains of N2.07 billion were the major drivers of the uplift at the bottom lines, as big insurers and banks are the beneficiaries of the abrupt devaluation of the currency that magnifies the dollar denominated assets in their books.
At the same time, Linkage Assurance’s gross premium written (GPW) was up 21.16 percent to N12.94 billion as at September 2023 from 10.68 billion the previous year.
Gross premium income (GPI) rose 13.57 percent to N10.21 billion in September 2023 from N8.99 billion the previous year.
A breakdown of GPI shows premium from Fire business increased by 23.11 percent to N2.49 billion while revenue from Motor segment spiked by 80.78 percent to N3.47 billion. However, revenue from oil and gas were down 2.42 percent to N3.62 billion in the period under review.
Net premium income (NPI) followed the same growth trajectory as it spiked by 4.97 percent to N5.06 billion as at September 2022.
Despite an improvement in revenue and profit, there are concerns about deteriorating underwriting performance in the face of inflationary pressures and a difficult operating environment.
A combined ratio of 161.44 percent that is higher than last year’s 156.61 percent is higher than the 100 percent threshold, and this means the company pays more claims and expenses than the premium it generates.
The company paid N2.38 billion claims to policyholders in the third quarter of the year, which represents an uptick of 41.66 percent from last year’s N1.68 billion. Claims ratio moved to 47.02 percent in the period under review from 35.01 percent the previous year.