Pls who can give a concrete analysis on insurance sector: especially AIICO, NEM, Allied and Custodian. Thanks

No solid company in this sector, all is having different issues and its long term, which they have been unable to solve across board.
In the interest of fair hearing and analysis, check their last 5 years annual reports and you will see that some don't even have any report in the public domain. And this makes any analysis difficult to come by.

analysis in what respective.
What do you want to know about them

stockbull:


analysis in what respective.
What do you want to know about them

If anyone of them is having a great fundamental or potential of rewarding the shareholder at the long run

they are basically like the civil service ...no real impact just waiting for government to pay the annual life insurance and pick up the local content percentages of the ioc/foreign players

The National Insurance Commission (NAICOM) is seriously concerned about the rising management expenses of Insurance companies in Nigeria. To question the expenses, NAICOM joined shareholders to scrutinise financial reports closely at the yearly general meeting and also to demand explanations from the boards, something this is of great interest to investors of Insurance companies.


NAICOM organized a one day workshop themed 'Improving investment attractiveness of the Nigerian Insurance industry". At this forum it was discovered that the management expenses of Nigerian insurance companies are highest in Africa as companies spent 80% of premium generated on themselves. This is a major factor weakening the financial stability of the Nigerian insurance companies and the forum highlighted that in most other countries, management cost range between 25-30% of the premium earned by a given company but in Nigeria it is as high as 80%.

The forum also lamented the fact that insurance companies in Nigeria keep undercutting eachother to gain business but do not target the untapped potential of insurance in Nigeria. It is a known fact that more than 90% of people in Nigeria do not have any form of life insurance in Nigeria. So the forum was questioning why the insurance companies keep on ignoring this large market that is untapped in the country.


The Deputy Commissioner for Insurance (Technical), Mallam Ibrahim Hassan urged shareholders of companies to be mindful of reported operational expenses in the books of companies and described the current situation where a large portion of the Gross Premium ends up in operating expenses as not healthy. He said that the adoption of IFRS in financial reporting is in line with international best practice and should attract foreign investment in the insurance sector.


So what the forum discussed is very essential to shareholders of Nigerian insurance companies who have been suffering for the past few years. Shareholders of these companies will be hoping that companies get a grip of their management expenses and report what is fair so that their investments can recover some of the losses from the past few years.

reporting for easykobo.com on Monday, March 25 2013 from Lagos, Nigeria.

EasyKobo

http://www.punchng.com/business/money/underwriters-spend-80-of-income-on-management-naicom/

80 percent of income is spent on management cost

please oh bros and sis, what is this about? are the shares of these companies going to become the next google or apple like shares? should i invest my small naira in them? abeg give me some insider trading news.. i have never seen so much excitement over insurance companies.

Na for where you wan see that one na?

Yes I can! In just one word!
USELESS!!!!!!
That's my analysis. Thanks. Hope I get the job.

delors: Yes I can! In just one word!
USELESS!!!!!!
That's my analysis. Thanks. Hope I get the job.

How did U come about the 'verdict!

phemmie06: If anyone of them is having a great fundamental or potential of rewarding the shareholder at the long run

i will come with my view soon

If you have cash you dont need go and buy shares with it - any shares. At least you wont regret losing what you dont need!

Consult a reputable broker. He will guide you.

olushowunm: No solid company in this sector, all is having different issues and its long term, which they have been unable to solve across board.
In the interest of fair hearing and analysis, check their last 5 years annual reports and you will see that some don't even have any report in the public domain. And this makes any analysis difficult to come by.

the above contributor nails this with his reply
i recall hearing 2 days back on CNCBC Africa that the Nigerian insurance sector is a no show
the op and other would be investors try watching it more often

It is both sad and unfortunate how people parade their ignorance on something they know nothing about. Insurance as a sub sector has not penetrated deeply in Nigeria because of these form of reckless submissions by people who should know. When the stock market was booming, insurance as a sub sector made so many people rich with their penny stocks, today, the market has gone south across board and it has affected all the companies. As for long term fundamentals, google the likes of Mansard, cornerstone, and perhaps custodian. You will realize what has been going on.

For those of you that say God is your insurance, I pity your recklessness. I repeat, my cousin had an accident with one of my cars coming back in December from the East, the cost of total repairs, in the neighborhood of about 450k was borne by the insurance company. I have household, fire and burglary, etc. I have rest of mind because whether fire, flood, robbery or whatever that happens to any of my assets, my insurance company will pay.

Finally, rather than claim that the companies are just sitting down and waiting for government patronage, please learn a little more about industries and sectors outside yours, that is what makes a man brilliant and smart. By the way, I use Cornerstone Insurance and they have never failed me.

So some people think the Insurance business in Nigeria is not worth investing in abi? Good. The stock market IS NOT a good reflection of the health (or otherwise) of the Industry. You think Old Mutual investing in Nigeria is a mistake abi? All companies in the financial sector have had issues in the past five years worldwide. However, the Nigerian Insurance industry is as healthy as the Economy can allow. Its a key emerging market sector. And a hint: the healthiest one is not even quoted. Its private.

lafile: So some people think the Insurance business in Nigeria is not worth investing in abi? Good. The stock market IS NOT a good reflection of the health (or otherwise) of the Industry. You think Old Mutual investing in Nigeria is a mistake abi? All companies in the financial sector have had issues in the past five years worldwide. However, the Nigerian Insurance industry is as healthy as the Economy can allow. Its a key emerging market sector. And a hint: the healthiest one is not even quoted. Its private.

Good submission.

olushowunm: No solid company in this sector, all is having different issues and its long term, which they have been unable to solve across board.
In the interest of fair hearing and analysis, check their last 5 years annual reports and you will see that some don't even have any report in the public domain. And this makes any analysis difficult to come by.

;DI have worked with an insurance company and one of the things I do is to analyse their annual reports and accounts to enable my company know their capacity and the amount of business to co-insure or cede to them. So, they all have annual accounts. Ask their shareholders and the right people. Verify anything you write pls.

Op, before critical analysis begin you first want to know that:
Insurance companies generate funds frm banks and all other financial institutions, Federal Government's and indeed all governments' properties, multi-nationals, private companies spanning all sectors, repeat ALL sectors of the nigerian economy, individuals (sadly only a small percentage) use insurance. Like I already mentioned, even the banks go to insurance companies to insure themselves and even insure the money they save for you. Insurance is like a (or should be the) backbone of all businesses... against risks!

Every person & every property (personal/official) should be insured. I'm just giving you the scope of the ideal relevance of insurance and where the generate funds.

insurance sector is only as healthy as the health of the totality of the entire economy/nation.

Having said that I want to clear something here:
I 'strongly' disbelieve that insurance firms use abt 80% of the premium collected for management costs. Rather it should be that that article meant to say 80% of the profits earned on the premium.
When this premiums are paid, the companies in turn, use the monies as capital to do businesses (businesses which vary from one company to another). At the end they make profit from this deals they do. Now, from the proceeds, they pay the client interest on his money(a prior mutual agreement on the rate), pay the marketers their stipends and commissions, pay their electricity bills, water bills, salaries, rents, fuel generators and cars, repairs and general maintenance etc.
After all these expense the company might have a substantial/little amount to declare as profits of which the shareholder may/may not be happy with.

It is false and misleading to say that insurance companies spend 80% of premium on management expenses. For some of us here who don't know what 'premium' is: its the total money a client (the insured) pays as cover to the insurance coy per annum. So if a client is paying 10,000 naira monthly it'll amount to 120,000naira per annumm. This 120,000 is the premium. so a coy doing & in business just leaves the money laying down there and keeps spending out of it up to 80? na political party?

hardbody: It is both sad and unfortunate how people parade their ignorance on something they know nothing about. Insurance as a sub sector has not penetrated deeply in Nigeria because of these form of reckless submissions by people who should know. When the stock market was booming, insurance as a sub sector made so many people rich with their penny stocks, today, the market has gone south across board and it has affected all the companies. As for long term fundamentals, google the likes of Mansard, cornerstone, and perhaps custodian. You will realize what has been going on.

For those of you that say God is your insurance, I pity your recklessness. I repeat, my cousin had an accident with one of my cars coming back in December from the East, the cost of total repairs, in the neighborhood of about 450k was borne by the insurance company. I have household, fire and burglary, etc. I have rest of mind because whether fire, flood, robbery or whatever that happens to any of my assets, my insurance company will pay.

Finally, rather than claim that the companies are just sitting down and waiting for government patronage, please learn a little more about industries and sectors outside yours, that is what makes a man brilliant and smart. By the way, I use Cornerstone Insurance and they have never failed me.

I lend my voice to these words here.

On point ! You are very very on point

in_sure:



Having said that I want to clear something here:
I 'strongly' disbelieve that insurance firms use abt 80% of the premium collected for management costs. Rather it should be that that article meant to say 80% of the profits earned on the premium.
When this premiums are paid, the companies in turn, use the monies as capital to do businesses (businesses which vary from one company to another). At the end they make profit from this deals they do. Now, from the proceeds, they pay the client interest on his money(a prior mutual agreement on the rate), pay the marketers their stipends and commissions, pay their electricity bills, water bills, salaries, rents, fuel generators and cars, repairs and general maintenance etc.
After all these expense the company might have a substantial/little amount to declare as profits of which the shareholder may/may not be happy with.

It is false and misleading [/b]to say that insurance companies spend 80% of premium on management expenses. For some of us here who don't know what 'premium' is: its the total money a client (the insured) pays as cover to the insurance coy per annum. So if a client is paying 10,000 naira monthly it'll amount to 120,000naira per annumm. This 120,000 is the premium. so a coy doing & in business just leaves the money laying down there and keeps spending out of it up to 80? na political party?

I'll back for proper analysis.
Thanks

So [b]The National Insurance Commission (NAICOM) is misleading the world with their analysis of a sector they are regulating- nice!!!

Same way CBN mislead people about PHB,Oceanic etc etc abi