The Nigerian insurance sector seems not to be doing fine. Apart from the fact that the company is just reporting its 2014 full year result in Q1 2016, International Energy Insurance, IEI PLC posted a record loss.
In its fully audited result, the company released to the Nigerian stock exchange, a loss after tax of NGN 2.1 billion. This is a huge slide from its 2013 full year profit of NGN 422 million, representing a whopping 599% decrease in profit year on year. In 2013 when the company was still operating a group structure, it reported a marginal profit of NGN 38 million.
As Nigeria’s insurance sector brace up to get more premium and develop newer products, its shocking to know that IEI said in its report that the company is “not involved in any research and development“.
IEI seems to be in a huge mess as its net asset which was N 9 billion in 2013 has slipped by 9%. Total equity has fallen by 325% leaving investors with 1.5 billion loss.
Investors and shareholders in IEI PLC are now in a loss position of N 169 per share. This is a sharp contrast to its 2013 earning per share, EPS of N 34 per share, this is exactly 599% year on year loss to anyone holding the company’s stock.
As Nigeria’s insurance sector braces up to get more premium and develop newer products, it’s shocking to know that IEI said in its report that the company is “not involved in any research and development“. This negates the boom story that some analysts have projected about the sector.
For a company that is deep in debt, developing new products, adopting new technologies and innovation is the only reasonable move to make. This will only happen when the company takes R&D seriously.
AXA Mansard, a major player in the category had in February partnered with Africa Internet Group, AIG, the parent company of Jumia. The company invested in Jumia and other AIG’s eCommerce property to sell AXA’s products. Even when AXA will not make record premium by this move, bets and moves like this, are what IEI should be looking at doing.