NEM Insurance shareholders approve N3.009 billion dividend for 2023

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Shareholders of NEM Insurance Plc have approved a dividend of N3.009 billion dividend recommended by the Board of Directors for the 2023 financial year.

The approval was given at the company’s 54th Annual General Meetings held in Lagos.

The dividend translates to a dividend of 60 kobo per N1 ordinary shares payable to shareholders subject to deduction of withholding tax at the appropriate rate.

Addressing shareholders at the AGM, the Group Chairman, Mr. Tope Smart said that insecurity, incessant power outages, exchange rate fluctuations, and high rate of inflation contributed to low foreign direct investment, while many of the manufacturing and telecommunication companies recorded huge exchange losses in 2023.

Financial performance

He noted that insurance revenue grew from N31.4 billion in 2022 to N52.1 billion in 2023, an increase of 66% over the previous year.

Investment Income recorded an increase of 106% relative to 2022. The total investment income in 2022 was N1.6 billion while that of 2023 was N3.3 billion.

According to Smart, the claims paid during the year were N15.7 billion as against N12.3 billion in 2022; an increase of 28% over that of the preceding year.

He noted that the claims ratio for 2023 was 30% while that of 2022 was 40%, a decrease of 25%.

Smart added that the management expenses increased from N3.7 billion in 2022 to N5.3 billion in 2023, a 43% increase due to the impact of inflation and business growth during the year under review.

“The Group’s Profit before Tax (PBT) for the year under review was N18.9 billion and N5.5 billion in 2023 and 2022 respectively, an increase of 244%.

The Parent Company’s PBT was N19.2 billion for 2023 and N5.5 billion for 2022, an increase of 249%.

The position of the Group Financial Assets between 2022 and 2023 increased by 160% while Total Assets and Total Equity also improved by 68% and 43% respectively,” he said.

He noted that the Group’s EPS for the year under review was 260 kobo while that of the previous year was 108 kobo adding that the parent company’s EPS for 2023 was 264 kobo against the preceding year of 108 kobo.

High migration of talents

The Managing Director/CEO Andrew Ikekhuanoted that the country was exposed to high migration of talents popularly referred to as “JAPA”.

According to him, the banking, insurance, medical, and information technology sectors were mostly affected by the “Japa Syndrome” in 2023.

He noted that while the National Bureau of Statistics pegged the unemployment rate at 4.2%, insecurity took a new dimension with a high wave of kidnapping across the country especially in the Northern states due to the activities of illegal mining in the Northwest, banditry and unabated Fulani herdsmen and farmers’ conflict.

“Despite the economic headwinds in 2023, the insurance industry recorded a growth rate of 4.82% year-on-year according to the National Bureau of Statistics. The new motor insurance rate, which was introduced by the National Insurance Commission (NAICOM) in December 2022, received the full support of the operators,” he said.

Ikekhua noted that the awareness of the new rate by the Nigerian Insurers Association (NIA) and the regulator’s position on full compliance contributed immensely to the giant growth recorded in the motor insurance portfolio and overall performance of the industry in 2023.

Industry’s New Recapitalization Regime

He said that the National Insurance Commission (NAICOM) still maintained its silence on the industry’s new recapitalization regime but rather concentrated its effort on Risk Based Supervision (RBS) in 2023.

“The supervision option according to the National Insurance Commission (NAICOM) is geared to reduce the risk associated with the industry and ensure that all the control functions are effective.

Other regulatory actions in 2023 include the introduction of regulatory sandbox operational guidelines, new market conduct guidelines for Takaful Insurance operators, and Enterprise Risk Management Framework for Takaful operators in Nigeria,” he said.

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