Corona insurance rises 18% as profits fuel rally

The purchase of shares in Coronation Insurance (WAPIC) increased the company’s market value by 18%, according to trading data from the Nigerian Stock Exchange.

The share price rose to 79 kobo from 67 kobo at the beginning of the week, taking its market valuation to N18.953 billion on Friday. Investor sentiment improved following the release of its first-quarter results, which showed the insurance company had returned to profitability.

Investors are lining up for shares of the insurer every week after the company reported a net profit of N4.448 billion, reversing a net loss of N1.098 billion in the comparable period in 2023.

The insurance company’s financial report for the first quarter of 2024 recorded an increase in insurance revenue of approximately 95.3% year-on-year, from N5.234 billion in Q1 2023 to N10.22 billion.

The high revenue growth was driven by an increase in the company’s expenses on insurance services of approximately 115% year-on-year, from N3.262 billion 12 months earlier to N7 billion.

Accelerated direct costs reduced the insurance company’s margin at a time when the reinsurance premium allocation was higher than in the previous period.

Coronation Insurance’s unaudited financial statements showed the company’s reinsurance premium allocation increased by 135% year-on-year to N4.114 billion from N1.747 billion in Q1 2023.

The impact on earnings was reduced by the amount recovered from reinsurers on incurred claims totalling N1.394 billion in Q1 2024 compared to N847 million recovered in Q1 2023.

The insurance company’s net profit was boosted primarily by the gain on the fair value of its financial assets during the period. It gained N2.423 billion from the tracing of its financial assets to their current carrying amount.

This resulted in the insurance company’s net investment income increasing to N3.099 billion from just under N352 million in the comparable period in 2023.

At the end of the period, Coronation Insurance Plc posted a pre-tax profit of N5.282 billion compared to a pre-tax loss of N1.251 billion in Q1 2023. #Coronation Insurance soars 18% as profits fuel rally

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