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Stock Market: NEM Insurance Closed 2020 With 31.62 Percent Gain

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Nigerian Exchange Limited - Investors King

Stock Market: NEM Insurance Closed 2020 With 31.62 Percent Gain – NEM Insurance Plc led the top gainers’ chart in the last week of 2020 with a 31.62 percent gain as the Nigerian Stock Exchange closed the year with a 50.3 percent gain.

During the four days trading week, investors traded total shares of 1.806 billion valued at N25.966 billion in 14,634 transactions, against a total of 2.756 billion shares worth N40.311 billion exchanged in 17,459 deals in the previous week.

In terms of volume traded, the financial services industry led the activity chart with 1.266 billion shares estimated at N7.630 billion but exchanged hands in 7,251 transactions. The financial services industry contributed 70.07 percent and 29.38 percent to the total equity turnover volume and value traded, respectively.

This was followed by the oil and gas industry with 193.541 million shares valued at N783.214 million carried out in 1,093 transactions. The consumer goods industry came third with a turnover of 117.755 million shares estimated at N1.050 billion shares in 2,116 transactions.

AIICO Insurance Plc, Access Bank Plc and United Bank for Africa Plc were the three most traded equities during the week with a combined 763.173 million shares worth N3.029 billion in 1,764 deals and accounted for 42.25 percent and 11.67 percent of the total equity turnover volume and value, respectively.

The Nigerian Stock Exchange All-Share Index gained 3.79 percent to close the week at 40,270.72 index points while the market value of the Exchange expanded by 3.83 percent to N21.057 trillion.

Accordingly, all other indices finished higher with the exception of NSE Banking, AFR Bank Value, and Consumer Goods which declined by 0.56 percent, 0.02 percent and 0.50 percent while the NSE ASeM and NSE Growth Indices closed flat.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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AIICO Insurance Boosts Infrastructure Development with 5% Stake in InfraCredit

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AIICO Insurance Plc has acquired a five percent shareholding in Infrastructure Credit Guarantee Company Limited (InfraCredit).

This strategic investment positions AIICO as the second domestic institutional investor admitted by the infrastructure credit guarantee institution, following Leadway Assurance Plc.

The infusion of capital from AIICO is set to elevate InfraCredit’s paid-in capital base to an impressive $175.14 million (approximately NGN 148.55 billion), translating into an aggregate guarantee issuing capacity of up to NGN 742.77 billion (about USD 875.7 million).

This equity injection will become part of InfraCredit’s core capital, enhancing its guarantee issuing capacity and contributing to the sustenance of its coveted ‘AAA’ credit rating.

InfraCredit, known for deploying innovative credit enhancement solutions, has been pivotal in mobilizing private sector financing for infrastructure projects across various sectors of the Nigerian economy.

AIICO’s investment underscores its commitment to bridging the infrastructure gap in the country, marking the evolution of a long-term partnership with InfraCredit.

Babatunde Fajemirokun, the Chief Executive Officer of AIICO Insurance, emphasized the company’s dedication to supporting infrastructure development.

He stated, “This investment is the evolution of what we at AIICO Insurance believe will be a long-term partnership with InfraCredit. Over the past two years, AIICO Insurance has invested in InfraCredit guaranteed bonds and participated in novel financing arrangements promoted by the company to bring infrastructure investment to areas that have been significantly underserved.”

The Chairman of the InfraCredit Board of Directors, Sanjeev Gupta, welcomed AIICO as a new shareholder and highlighted the importance of fostering a strong partnership between the public and private sectors.

Gupta said, “AIICO’s investment is in line with our vision of creating a strong partnership between the public and private sectors. This partnership aims to attract private sector capital for infrastructure financing sustainably.”

Chinua Azubike, the CEO of InfraCredit, expressed enthusiasm about AIICO’s admission as the second private domestic institutional investor.

Azubike stated, “The admission of AIICO Insurance, the second private domestic institutional investor in InfraCredit, reinforces the confidence in the sustainability of InfraCredit’s unique business model.”

The AIICO Insurance equity investment is expected to further strengthen InfraCredit’s core capital base, expand its guarantee capacity, and facilitate deeper market penetration.

This collaboration aims to advance sustainable finance for impactful infrastructure projects in Nigeria, aligning with the nation’s broader goals for economic growth and development.

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Resilience Amid Challenges: Nigerian Insurance Giants Report 165% Surge in Profits

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Against a backdrop of a challenging business environment and meager insurance penetration in Nigeria, thirteen leading insurance companies have displayed resilience by declaring a collective profit before tax (PBT) of N57.1 billion in the first nine months of 2023.

This signifies a 165% increase compared to the N21.51 billion reported during the same period in 2022.

The standout performers among these insurers include AXA Mansard Insurance, Cornerstone Insurance, and AIICO Insurance, which collectively contributed significantly to the sector’s stellar performance.

AXA Mansard Insurance, particularly, recorded a remarkable 471% increase in profit before tax, reaching N15.1 billion in the nine months ending September 30, 2023.

Notably, AXA Mansard Insurance stands out as the sector leader, declaring an interim dividend of 6 kobo per N2 ordinary share, payable to shareholders on December 15, 2023, showcasing a commitment to rewarding investors.

The remarkable financial performance of these insurers has had a tangible impact on the NGX Insurance Index, reflecting a 68.44% Year-to-Date growth as of November 17.

Analysts attribute this positive trajectory to the sector’s resilience and profitability.

However, the sector grapples with impending recapitalization efforts and the need for regulatory reforms. The proposed Consolidated Insurance Bill awaits presidential assent, promising transformative changes for the industry.

Analysts believe these changes, coupled with increased budgetary allocations from the Federal Government, will strengthen the sector’s capacity to contribute significantly to the nation’s GDP and employment creation.

As the industry anticipates legislative support, stakeholders remain hopeful for a new era of growth and global best practices in the Nigerian insurance landscape.

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Nigeria’s Insurance Sector Surges: Premium Income Reaches Record High of N551.4 Billion in Q2 2023

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Nigeria’s insurance sector reported a surge in premium income to N551.4 billion in the second quarter of 2023, according to data recently published by the National Insurance Commission (NAICOM).

This figure represents a 49 percent quarter-by-quarter (q/q) increase and a 77 percent year-on-year (y/y) growth compared to the same period in 2022.

FBQuest analysts have attributed this growth to the sector’s resilience in the face of various macroeconomic challenges, including high inflation, rising energy prices, and foreign exchange shortages.

The robust y/y premium income expansion was largely driven by an 81 percent increase in the non-life insurance business, amounting to N362.4 billion in Q2 ’23, with fire insurance making the most significant contribution.

Even the life insurance business, which accounted for approximately 34 percent of the sector’s premium income, soared by 77 percent y/y to N189.0 billion in Q2 ’23.

The cumulative premium income generated by the sector over the first half of 2023 increased by 45 percent y/y to N862.9 billion.

Despite this impressive growth, analysts warn that Nigeria’s insurance sector must still address the challenge of low insurance penetration in the country.

Nevertheless, the industry’s total assets grew by 18 percent y/y to N2.7 trillion in Q2 ’23, with the non-life insurance business playing a significant role in this increase.

While there is undoubtedly more work to be done, these figures are undeniably a cause for celebration in the nation’s insurance landscape.

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