Mutual Benefits’ net income grows 12% in 2018 on bigger premium

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Net income of Lagos-based life and general insurer, Mutual Benefits Assurance Plc, accelerated to its highest level in the last four years in full year 2018 spurred by tangible improvement in premium income.

The insurer’s net income appreciated to N1.15 billion in 2018, the highest in the last four years, indicating some 12 percent increase over N1.02 billion reported in 2017 as premium income surged 17 percent to N15.6 billion.

Mutual Benefit Assurance posted improvement in premium from non-life and life business. Premium income from both categories expanded 10 percent and 18 percent respectively to N9.79 billion and N5.19 billion respectively, with the former accounting for 62 percent share in gross premium.

Claims paid by the insurer nearly doubled to N8.28 billion in the review year from N4.87 billion in the prior year. Claim recovered also trended northwards, surged some 18 percent from N2.27 billion in 2017 to N2.67 billion in 2018.

Underwriting profit, which is difference between net underwriting income and expense contracted 16 percent from N3.7 billion in 2017 to N3.06 billion in 2018, as underwriting expenses which upped 35 percent outpaced growth in income (18%).

The insurer’s operating profit declined 6 percent from N1.17 billion in the prior year to N1.10 billion in the review year triggered by net foreign exchange loss worth N50.5 million, and elevated management expenses.

The insurer explained that the exchange loss on foreign loan indicates the impact of 2.25 billion Japanese Yen (JPY) payable to Daewoo Securities (Europe) Limited as at December 31 2018 to the company’s functional currency in naira.

Mutual Benefit invested a proportion of its financial assets in foreign currency to hedge against future exchange losses that may arise on conversion of foreign currency denominated loan balances.

The company’s finance income spiked 64 percent to … Read More...