NATIONAL Insurance Corporation’s (NIC) pre-tax profit more than doubled, largely due to general insurance portfolio proceedings.
NIC, the public insurance company, said in its financial statements that pre-tax profit fell from 33.65 billion/- earned for a year ending June 2020 to 73.1 billion/- last June.
General insurance earned a pre-tax profit of 64.97 billion/- compared to 8.12 billion/- generated by life insurance at the end of June 2020.
NIC, the country’s first insurance company established in 1963, had a net written premium of 57.49 billion/- compared to 45.47 billion/- at the end of June 2020.
Profit also increased as management cut expenses, particularly administrative and acquisition costs, by almost 5.0% to 41.35 billion/- from 43.49 billion/-.
The Company’s total assets, year-over-year, grew exponentially to reach 391.49 billion/- at the end of last June, from 350.35 billion/-, driven mainly by treasury bills and investment property.
Investment in treasury bills fell from 50.07 billion/- in 2019/20 to 108.1 billion/- in 2020/21, while properties fell from 93.1 billion/- to 113.9 billion/-.
The share of reinsurers in the provision of insurance contracts also supported the growth of total assets after jumping from 11.91 billion/- to 16.79 billion/-.
Thus, NIC has consolidated its position in the market thanks to a solid asset base and a good reinsurance agreement, which gives it great underwriting capacity.
Corporate underwriting is well and adequately protected by the strongest, yet advanced and best-in-class international reinsurance partners, both through treaty and facultative reinsurance.
The Comptroller and Auditor General (CAG) said in his 2020/21 report that NIC was among 16 public companies with insufficient working capital and therefore dependent on loans.
The report advised institutions to seek funds from the government to increase their capital so that they can repay their loans on time.
The CAG warned that the high debt ratio for capital, among other things, was due to the increase in loans and costs after the non-payment of loans and interest rates on time.