Linkage Assurance reports a loss of N4 billion, Surplus Claim payout, Underwriting Expenses major driving factors

Linkage Assurance Plc has reported N4 billion loss for the year 2021 at the end of the inflated 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% rise from the amount utilized for the same purpose in 2020 but spend N8.8 billion of this amount on claims expenses (N5 billion) and underwriting expenses (3.8 billion). This means that 85% of GPI was tied to claims settlement.


The outcome is despite the year 2021 being a comeback 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 of 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.

The highlight of the news

         Gross premium written, amounted to N11 billion in 2021, which is N2.8 billion higher than the amount same time a previous year at N8.3 billion

         Reinsurance expenses soar during the period of study by 43% 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 N6.3 billion, a 23% high from N5.1 billion in the previous year

         However high net claims expenses and Underwriting expenses pushed the underwriting result to an N2.6 billion negative in 2021 compared to the record positive of N826 million in the previous year.

         Investment and another income dip 66% 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 were N2.7 billion compared to the N2.1 billion during the Covid year.

What you need to do know

Linkage assurance traded at N0.51 while its market capitalization stood at N7.4 billion as of Thursday, 7th April 2021. 


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