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Oasis Insurance ended 2013 with a loss of N71.83m


News » Editorials
Nigeria

June.20.2014

Oasis Insurance plc was incorporated on November 9, 1992, and licensed under the Insurance Act 2003, to transact all classes of General Insurance. Oasis is a public limited company with authorised share capital of N5 billion and paid up share capital in excess of N3 billion. Oasis is a leader in the provision of insurance products and services of high user-value not only in general insurance, but especially in the specialised areas of oil, energy, aviation, engineering and industrial risks management.

The insurer has 8 billion shares outstanding with total assets of N3.9 billion, at the end of December 2013.

Financial results for 2013

Oasis just released its 2013 audited financial statement on the website of the Nigerian Stock Exchange showing it recorded unimpressive results.

For the year ended December 2013, Oasis’s gross premium written shrank by 22.5 percent to N1.24 billion from N1.60 billion corresponding period of 2012 (FY12). The inability of the insurer in boosting its underwriting capacity led to a 27.41 percent decline in net premium earned to N1.04 billion in FY13, compared with N1.43 billion as of FY12.

The company posted a loss before tax of N60.65 million in FY13, from a profit position of 247.63 million in 2012.

It should be noted that growth of most insurance companies operating in Nigeria was stifled by regulatory enforcement of ‘No Premium, No Cover regulation.’

This is a section of the 2003 Insurance Act that stipulates that premiums must be paid for before an insurer can incept cover. This regulation was enforced by the regulator (NAICOM) with effect from January 1, 2013.

It also recorded a loss after tax of N71.83 million in the review period from a profit position of N16.68 million at year end 2012. It total assets were up slightly by 1 percent to N3.9 billion in FY13, compared with N4.0 billion as of FY12.

Management expenses and provisions for doubtful accounts increased by 4.3 percent to N758.34 million in FY13, as against N792.34 million as of FY12. Underwriting profits were down by 28.8 percent to N633.18 million in 2013, from N889.13 million as of FY12. Debtors and prepayments were down by 84.27 percent to N35.02 million in FY13, as against N222.70 million as of FY12.

The company can improve on last year’s performance by introducing product that can penetrate the market as the sector’s contribution to the Nigeria economy in the just rebased exercise was abysmal.

Insurance sector contribution to the country’s GDP based on 2013 rebased figures were N453.74 billion, which is 0.56 percent of the total GDP figures. 2013 was a challenging year for firms operating in the insurance sector as they worked assiduously hard to meet the N1.1 trillion gross income targets by 2017.

Share performance and outlook

The company’s share price closed at N0.53 – June 17, 2014, on the floor of the NSE, while market capitalisation was N4.24 billion.

With the acquisition of 71.2 percent of its shares by First Bank Nigeria (FBN) Assurance Limited, Oasis has immense synergy to enjoy from the merger.

Article Credit: Businessdayonline

Updated 5 Years ago
 

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