As a result of a higher defaults in premium, Custodian and Allied Insurance PLC, reported a net loss of NGN435 million for the third quarter of the year.
The impact of Nigeria’s recession has taking a huge toll on the once profitable business. Last year, the company reported a net profit of NGN655 million.
Although its gross premium income increased to NGN7,6 billion compared to NGN6 billion, unearned premium rose to NGN1,6 billion compared to NGN800 million.
Just as in the case of NEM Insurance, Custodian is also paying more for its re-insurance expenses due to the devaluation of the Naira (NGN) against the Dollar (USD).
The company paid NGN1,4 billion last year for re-insurance expenditure, in the third quarter, the company paid of 2016, Custodian paid NGN2,1 billion.
The company indemnified more clients within the quarter as its claims expenditure rose to NGN2,6 billion compared to NGN1,7 billion the company paid out in 2015.
Custodian is still a very viable company according to its net asset disclosed as NGN22,8 billion compared to its total liabilities of NGN11,1 billion.