NEM Insurance Records Robust Profit in Q4, Buoyed by Significant Fair Value and Foreign Exchange Gains 


NEM Insurance has recorded blowout profit to end 2023 financial year, thanks to fair value gain and foreign exchange revaluation gains as the insurer maintains efficient underwriting performance.

The insurer’s diversified product base is contributing to earnings growth, getting increasing recognition among customers who crave for quality products.

NEM Insurance has recorded a strong set of results for the final quarter of 2023, as net income surged by 252.38 percent to N18.50 billion from N5.25 billion as at December 2022.

Fair value gains and foreign exchange revaluation gains of N4.80 billion and N10.77 billion added impetus to profit growth, and that good tidings for investors who awaits dividend distribution.

There were improvements in investment income and underwriting performance, and that means the company is not paying out claims than the revenue that it is receiving.

Combined ratio stood at 99.25 percent as at December 2023, although lower than 2022’s 92.92 percent, according to MoneyCentral calculations.

The combined ratio is typically expressed as a percentage.

A ratio below 100 percent indicates that the company is making an underwriting profit, while a ratio above 100 percent means that it is paying out more money in claims that it is receiving from premiums.

Even if the combined ratio is above 100 percent, a company can potentially still be profitable because the ratio does not include investment income.

The insurer paid N9.35 billion in claims to policyholders, which represents a 51.29 percent increase from 2022’s N6.18 billion.

Claims ratio fell to 28.75 percent in the period under review from 28.92 percent as at December 2022.

As a result of soaring management costs, operating expense ratio (OPEX) ratio increased to 70.77 percent in December 2023 from 64.04 percent as at December 2022.

It is important to note that the insurer key segment contributed to top line (revenue) growth.

Gross premium income (GPI) increased by 88.86 percent to N62.94 billion in December 2023 from N33.36 billion as at December 2o22.

Net premium income (NPI) grew by 52.19 percent to N32.54 billion in the period under N21.39 billion the previous year.

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