Regency, Mutual Benefit, Linkage stocks lift Insurance Index to 197.46 index points

By Favour Nnabugwu

The growth in the Nigerian Stock Exchange Insurance Index for the week can be attributed to the appreciation of most insurance stocks such as; Regency Assurance, Mutual Benefits Assurance and Linkage Assurance Plc which all appreciated with a minimum of 10 percent for the week.

According to the report, the trio (Regency, Mutual Benefits and Linkage) recorded an increase of 22.2 percent, 11.43 percent and 10 percent respectively, placing the aforementioned firms in the top 10 price gainers for the week.

Recall that during the week, five insurance companies which comprises of; AIICO, NEM, Regency Assurance and 2 others gained a total of N2.29 billion in value for just one day, as earlier reported by Nairametrics.

The NSE All-Share Index and Market Capitalization depreciated by 1.74% to close the week at 38,648.48 and N20.221 trillion respectively.

Sequel to this, most indices finished lower, except NSE Mainboard, NSE Insurance, NSE ASeM, NSE MERI Growth, NSE Consumer Goods and NSE Oil/Gas Indices, which rose by 0.37 percent, 2.84 percent, 0.12 percent, 0.24 percent, 2.18 and 0.59 percent while the NSE Sovereign Bond Index closed flat.
The NSE Insurance Index returned 4.2 percent on a Year-to-Date basis.

On a general note, the Financial Services Industry traded 1.2 billion shares valued at N10.272 billion in 12,518 deals for the week(measured by volume); thus contributing 71.64 percent and 43.64 percent to the total equity turnover volume and value respectively Insurance: AIICO, NEM, 3 others gain N2.29 billion in market capitalisation

The Nigerian Stock Exchange Industrial Index at the close of trading activities for the second week in the month of March, closed on a relatively bearish note.

At the close of trading activities on the Nigerian Stock Exchange on the 12th March 2021, the industrial index declined by 1.03 index points, to close at 1923.55 index points for the week.

When compared to the overall performance of the market, the NSE Industrial index fared better as it declined by –0.05%, while the NSE All-Share index and market capitalization depreciated by 1.74 percent to close the week at 38,648.48 and N20.221 trillion respectively.

What you should know

The NSE Industrial Index was designed to provide an investable benchmark to capture the performance of the Industrial Sector. It comprises the most capitalized and liquid companies in the industrial sector and is based on the market capitalization methodology

The index monitors the performance of ten industrial companies on the Nigerian Stock Exchange which includes Dangote, BUA, Lafarge Cement and others.

The overall performance of the companies for the week was relatively bearish, as the index closed on a positive note with three losers relative to one gainer.

Investors of the banking giant lost a total of N51.3 billion in the period under review.
Meanwhile, UBA posted a profit after tax of N113.8 billion in 2020 according to the audited full-year report for the year 2020.

The profit after tax posted in 2020, represents a 27.7% increase compared to N89.1 billion recorded in the previous year.
Ecobank Transnational Incorporation followed closely with a decline in market capitalisation by 14.17% in the review period.

A total of N15.6 billion was lost by investors of the banking giant between December 31st, 2020 and March 12, 2021.
Ecobank also posted a decline in profit for the year 2020, recording a year-on-year decline of 64% to stand at N35.9 billion compared to N99.46 billion recorded in 2019.Top gainers

Seplat Petroleum Development Company Plc gained the highest in the period under review as the stock price grew by 34.23% from N402.3 recorded on the last trading day of 2020 to N540 as of 12 March 2021, leaving its total market capitalisation at N317.8 billion.

The company’s shares grew by double figures despite the N30.71 billion loss recorded in its 2020 financial year.
Although the reason for this increase cannot be exactly established, it can be associated with the recovery of oil prices to pre-pandemic levels

Seplat also successfully raised US$260 million in debt to fund the completion of its ANOH Gas Processing Plant (“ANOH”). It is expected that this plant will help Nigeria to accelerate its transition away from small-scale diesel generators to cleaner, less expensive fuels such as natural gas for power generation.

Guinness Nigeria Plc, gained a total N9.86 billion between the period under review, representing an increase of 23.68%.

The company’s market capitalisation increased from N41.62 billion recorded as of December 31st, 2020 to N51.47 billion as of 12th March 2021.

Guinness recorded impressive growth in the Stock market despite the N317.42 million loss the Group posted in its Q2 2020 results released on 28 January 2021.
Flour Mills Nigeria Plc, followed with a gain of 14.23% to stand at N121.78 billion as of March 12th, 2021.


By Favour Nnabugwu

No fewer than 23 applications were declined by  National Pension Commission due to inability of the organisations to meet the requirements for issuance of certificates.

This is their inability of the 23 companies to get clearance for getting appropriate pension and insurance covers for their employees in the fourth quarter of 2020.

PenCom its report titled ‘Issuance of pension clearance certificates’

Part of the report read, “The commission received a total of 1,900 applications from private sector organisations for the issuance of pension clearance certificates.

“Out of this number, PCCs were issued to 1,877 organisations while 23 applications were declined due to inability of the organisations to meet the requirements for issuance of certificates

“The records show that a total sum of N9.88bn was remitted into the Retirement Savings Accounts of 41,923 employees of the 1,877 organisations.”

PenCom in its compliance guidelines for life insurance policy for employees and submission of insurance certificate issued to employers stated that companies that had no insurance covers for their workers would no longer be allowed to do any government business.

PenCom’s directive on issuance of certificate of compliance with the provisions of the Pension Reform Act 2014 to the general public, suppliers, contractors or consultants bidding or soliciting for contract or business from any Federal Government ministries, departments and agencies, stated that employers must fully comply with the provisions of the law.

It said, “In that regard, the commission issues annual pension clearance certificate to eligible organisations.

“The MDAs are reminded to ensure that only pension clearance certificates issued by the commission are accepted as evidence of compliance with the Pension Reform Act 2014.”

In the directive, PenCom stated that in accordance with the provisions of Section 4(5) of the 2014 and Section 5.5 of the guidelines for life insurance policy for employees, employers of labour covered by the PRA 2014 were required to submit copies of the insurance certificates with the schedule of benefits to the commission.

Agusto & Co. Limited, the pan-African credit rating agency and the foremost business information provider has released its 2021 insurance industry report. The 2021 edition of the annual report provides a comprehensive review of the insurance landscape in Nigeria and the near term expectation for the Industry.

Contained in the report is a review of the coronavirus pandemic, as it affects the Nigeria insurance industry and strategies adopted by insurers to minimise the associated disruptions while optimising the opportunities provided by the pandemic. Agusto & Co. estimates a 15% growth in Gross Premium Income (GPI) for the financial year ended 31 December 2020. Innovation in product distribution induced by the pandemic, regulatory-backed opportunities including the digitisation of marine insurance certificates and increasing awareness of the benefits of insurance products were some of the GPI growth drivers during the 2020 financial year.

According to Agusto & Co., the violence that trailed the #EndSARS protest in October 2020 adversely impacted the Industry in terms of additional claims, which in turn impaired profitability for the 2020 financial year and would moderate the performance of some insurers in 2021. Nonetheless, the riot that trailed the protest emphasised the importance of insurance products, particularly with the absence of a robust social security system in Nigeria.

According to Agusto & Co., the violence/riot that trailed the protest could be a catalyst for insurance uptake, given that the insurance penetration rate has remained less than 1% in Nigeria.

Agusto & Co. expects the on-going recapitalisation exercise to change the structure of the Industry. The persistent naira devaluation has reduced the strength of the Industry’s capital since the last recapitalisation exercise in 2007. Although some insurers have strengthened their capital base through earnings retention, the ability of most Industry operators to solely underwrite large ticket transactions has dwindled based on the lower value of the capital in USD terms. As at 31 December 2020, the Industry had an estimated capital base of $1 billion, significantly lower than $2.2 billion recorded as at 31 December 2007. As a result, the National Insurance Commission (NAICOM), the apex regulator in the Industry, raised the minimum capital to ₦8 billion (from ₦2 billion), ₦10 billion (from ₦3 billion), ₦18 billion (from ₦5 billion) and ₦20 billion (from ₦10 billion) for life insurers, non-life insurers, composite insurers and reinsurance firms respectively. The recapitalisation exercise has suffered some setbacks particularly as the COVID-19 pandemic ravaged the global economy, Nigeria inclusive. Consequently, NAICOM postponed the deadline for the recapitalisation exercise which was later stratified into two phases; December 2020 and September 2021. In addition, litigation by some Industry operators and aggrieved shareholders resulted in the postponement of the December 2020 deadline for the first phase of the recapitalisation exercise.

Notwithstanding the setbacks, Agusto & Co. believes the recapitalisation exercise could be a watershed in the Industry. In addition to the benefits accruing from a larger capital base from a risk underwriting perspective, improved investment management practices will be upheld by a larger investment portfolio driven by a need to generate adequate returns. The recapitalisation exercise has elicited mergers and acquisition transactions in the Industry. Agusto & Co. anticipates an uptick in these transactions as the deadline draws near. The shareholding structure of most insurers is expected to change in the near term as some investors leverage the exercise to either gain or increase exposure to the Industry. With the gradual rebound of the global economy, more foreign investors are expected in the Industry, given that the naira devaluation has reduced the value of insurance companies (in USD terms), despite the undisputed opportunities in the Nigerian insurance industry.

The entry of new players after the embargo that lasted over a decade was a key point in the Industry. In November 2020, six new operators were licenced in the life, non-life and reinsurance segments of the Industry. The firm anticipates the entry of more players, particularly from existing financial institutions seeking opportunities for diversification of income. Agusto & Co. believes that the new players will intensify competition in the Industry. New insurance products and business practices are also expected from these new players.

Agusto & Co. expects a better performance by the Industry in the near term on the opportunities accruing from the pandemic and the #Endsars is optimised. The gradual increase in the prevailing interest rate will also support the investment income of insurers. It is expected that more innovative product distribution channels will be introduced to reduce the dominance of insurance brokers. Notwithstanding, Agusto & Co. believes the insurance brokers will remain strategic to the Nigerian insurance industry given the wholesale focus of the Industry.

By Favour Nnabugwu

AIICO, NEM Insurance, Consolidate Hallmark, LASACO and Regency have gained a total of N2.29 billion in value last weekend  despite an overall bearish return in the NSE Market.

The five insurance companies which coincidentally are the only insurance companies that recorded positive growth recorded in Thursday March 11, 2021

Inference from the data of the Nigerian Stock Exchange market, indicates that the gains are due to appreciation in the share prices of the five insurance firms, part of which acted as a catalyst to lift the NSE Insurance Index by 0.69 percent as at close of business that Thursday..


AIICO Insurance which is the second most capitalized insurance company on the floor of the Nigerian Stock Exchange printed one of the highest gains today, as its share price appreciated by 4.27 percent to close at N1.22.

The increase in the share price acted as a catalyst in the appreciation of the firm’s market capitalization by about N1.033 billion, from N24.19 billion recorded as at close of business on Wednesday to N25.22 billion.

It is also pertinent to note that a total of 19.67 million units of the firm’s shares were traded on Thursday (the highest recorded by the firm since January 4, 2021), indicating a surge of about 179.4 percent when compared to the units traded a day earlier.

NEM Insurance

NEM Insurance Plc share price appreciated by 5.1 percent to close at N1.85 per share. This resulted in an increase in the firm’s market capitalization, from N17.66 billion as at the close of business on Wednesday to N18.56 billion, implying an increase of about N902.97 million for the aforementioned period.

Investors traded about 2.95 million units of the firm’s shares, indicating a surge of about 422.7 percent when compared to the units traded in the previous day.

Consolidated Hallmark Insurance

Consolidated Hallmark Insurance posted the highest increase by any insurance stock on Thursday. It recorded a 7.41 percent increase in its share price which closed at N0.29. The increase trickled down to the market capitalization which added N214.09 million, from N2.89 billion posted a day earlier.

It is worthy to note that a total of 978,670 units of the firm’s shares were traded on Thursday, indicating a decline of 73.95 percent when compared to the units traded previously.


LASACO Assurance Plc posted a 3.28 percent increase in its share price which closed at N1.26. The increase played a pivotal role in the advancement of its market capitalization, from N2.24 billion as at the close of business on Wednesday to N2.31 billion, implying an increase of about N73.35 million.

In lieu of this, a total of about 1.16 million units of shares were traded in the bourse, indicating a decline of about 29.8 percent when compared to the units traded a day earlier.

LASACO Assurance Plc had earlier reported the completion of its share reconstruction exercise, involving about 7.3 million ordinary shares. This exercise subsequently raised the initial share price of the firm to about N1.68.

Regency Assurance

Regency Assurance Plc gained about N66.69 million in market capitalization, after its share price appreciated by 3.45 percent to close at N0.30. The firm’s market capitalization as at close of business on Thursday stood at N2 billion.

A total of about 240,667 units of the firm’s shares were traded