As part of their commitment to underwriting business, life insurance operators steadily grew their liabilities to N476.44 billion within a space of three years from N341.61 billion, New Telegraph has learnt. The details revealed through a report by the Nigerian Insurers Association (NIA), covered the period between 2014 and 2016.
According to the study, the liabilities include Insurance Fund, Investment, Borrowing, Trade Payable, Share Capital, Reserves, Share Premium, and other liabilities. A breakdown shows that while the liabilities peaked at N341.61 in 2014, it increased by N90 billion to N430.72 billion in 2015 before the year under review.
The report, which also revealed a 10.62 per cent increase in assets of the underwriters from N341.02 billion to N476.46 billion between 2014 and 2016, showed Insurance Funds liabilities increased from N129.14 billion in 2014, N208.25 billion in 2015 to N234.89 billion in 2016. Similarly, the Investment liabilities rose from N97.01 billion in 2014 to N101.62 billion in 2015 and N120.12 billion in 2016. Borrowing in 2014 was N1.46 billion in 2014, N2.29 billion in 2015 and N2.76 billion in 2016. The trend continued with Trade Payable peaking at N4.37 billion in 2014, N6.02 billion in 2015 and N6.04 billion in 2016.
Share Capital was N55.88 billion 2014, N61.73 billion in 2015 and N59.21 billion in 2016. While liabilities on Reserves was N-9.99 billion in 2014, N-12.11 billion in 2015 and N-21.73 billion in 2016, that of Share Premium was N14,34 billion in 2014, N42.29 billion in 2015 and N52.65 billion in 2016.
Other liabilities were put at N22.44 billion in 2014, N20.65 billion in 2015 and N22,56 billion in 2016. Besides the report on liabilities within the period, NIA’s data had also revealed that the industry operators borrowed a total of N68.57 billion between 2013 and 2016. According to the data, non-life operators borrowed N60 billion as against life operators’ N8.57 billion.
The loan was badly affected by recession due to sudden increase in exchange rate. Specifically, AIICO Insurance Plc noted that its loan obtained at an exchange rate of N199 to the dollar in June 2015, which amounted to N1.07 billion, however, experienced a drop in value as the exchange rate hit N305 to the dollar in December 2016, subsequently moving it to N1.78 billion. The document revealed that in 2015, International Energy Insurance Plc had a borrowing liability of N4.46 billion, while Mutual Benefits Assurance Plc, had N4.07 billion.
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