Linkage Assurance posted a Loss before tax of N3.88bn as at December 2021 against a profit of N2.53bn in the prior period
By Eugene Onyeji
Underwriting firm, Linkage Assurance Plc has reported a N3.99bn loss for the year 2021, a net loss of 267 per cent when compared with N2.4bn profit recorded in 2020, giving no assurance to shareholders’ returns on investment.
According to the company’s audited financial statements for the period ended 31 December 2021 made available to the Nigerian Exchange Group (NGX), the insurer raked in a total gross premium income of N10.4bn in 2021, a 31 per cent rise from the amount utilised for the same purpose in 2020 but spent N8.8bn of this amount on claims expenses (N5bn) and underwriting expenses (3.8bn).
The year under review was challenging in terms of technical underwriting, pushing net claims ratio up 93 per cent from 31 per cent in 2020 largely due to major claims paid during the period such as claims arising from End-SARs protests and catastrophic losses in Oil & Gas and manufacturing sectors.
Despite the challenging business environment, its Gross premium written grew by 34 per cent to N11.16bn as at December 2021 from N8.33bn recorded in prior year comparative. The Company suffered an underwriting loss of N2.5bn as a result of increased technical expenses.
Linkage Assurance posted a Loss before tax of N3.88bn as at December 2021 against a PBT of N2.53bn in the prior period, the major driver being increased claims expenses and future value loss on Bond investments.
Reinsurance expenses also increased significantly during the period under review by 43 per cent from N3.5bn in 2020 to N5bn in 2021 pushing the net premium income to N5.4bn from N4.5bn.
Fees and commission income rose from N626mn to N834mn in 2021 while the net underwriting income stood at N6.3bn, a 23 per cent high from N5.1bn in the previous year. However high net claims expenses and Underwriting expenses pushed the underwriting result to a N2.6bn negative in 2021 compared to the record positive of N826mn in the previous year.
Investment and other income dip 66 per cent to close at N1.3bn in 2021 from N3.9bn in the year 2020. During the period, the insurer also paid more attention to management as the management expenses in 2021 was N2.7bn compared to the N2.1bn during the challenging business year.
Linkage, during the period, sustained efforts at growing its balance sheet, as total assets grew to N38.71bn, as against N33.88bn in 2020.
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Management of Linkage says, “We will continue to refine our strategy in line with the political, economic, sociological and technological changes in the industry. We will also continue to develop innovative products, alternative channels of distributions and strategic initiatives that will enable us achieve our corporate goals and objectives. With a medium-to-long term perspective, we believe that we will benefit from growth in these initiatives.”
Linkage Assurance Plc is a non-life insurance business in Nigeria licensed to underwrite numerous insurance classes including business, marine and motor insurance.
Business insurance classes include automobiles, property, general accident, liability group, compulsory insurances, oil and gas, marine and aviation and engineering.
Retail and direct insurance includes motor plans, estate insurance plans, citadel shield plans, shop comprehensive plans and event insurance.
Linkage Assurance Plc merged with Central Insurance Company Limited in 2007 as part of the recapitilisation and consolidation reforms of the National Insurance Commission (NAICOM).
