Linkage Assurance reports N4bn loss in 2021
Linkage Assurance Plc on Thursday reported a N4 billion loss for the year 2021 on the back of excessive payout, and an increase in underwriting profit during the period.
According to the company’s audited financial report, the insurer raked in a total gross premium income of N10.4 billion in 2021, a 31 per cent rise from the amount utilised for the same purpose in 2020 but spent N8.8 billion of this amount on claims expenses (N5billion) and underwriting expenses (3.8 billion). This means that 85 percent of GPI was tied to claims settlement.
The result is despite the year 2021 being a recovery year for many organisations and industries following the pandemic in 2020.
In addition to Covid, the Nigerian insurance space however suffered a snowballing consequence from the #EndSARS protest which led to the destruction of lives and properties – the Nigerian Insurers Association recently announced that over N11 billion was paid as claims for losses suffered during the 2020 #EndSARS protests.
The insurer said the company suffered an underwriting loss of N2.5 billion as a result of increased technical expenses as the loss before tax stood at N3.9 billion as at December 2021 against a profit of N2.5 billion in the prior period, the major driver being increased claims expenses and FV loss on Bond investments.
Gross premium written amounted to N11 billion in 2021, which is N2.8 billion higher than the amount same time previous year at N8.3billion, Reinsurance expenses soared during the period of study by 43 percent from N3.5 billion in N2020 to N5 billion in 2021 pushing the net premium income to N54 billion from N4.5 billion.
Fees and commission income rose from N626 million to N834 million in 2021 while the net underwriting income stood at N6.3billion, a 23 per cent high from N5.1billion in the previous year. However high net claims expenses and Underwriting expenses pushed the underwriting result to a N2.6billion negative in 2021 compared to the record positive of N826million in the previous year.
Investment and other income dip 66 per cent to close at N1.3 billion in 2021 from N3.9 billion in the year 2020. During the period, the insurer also paid more attention to management as the management expenses in 2021 was N2.7 billion compared to the N2.1 billion during the Covid year.
Linkage assurance traded at N0.51 while its market capitalisation stood at N7.4 billion as of Thursday, 7th April 2021.
