By NBF News

By Providence Obuh
Union Assurance Company Limited, a subsidiary of Union Bank Plc has recorded a gross premium of N2.39 billion for the financial year ended December 30, 2010.This represents a decrease of 12 per cent from N2.72 billion in recorded in 2008 to N2.39 billion in 2009.

The company posted a profit before tax of N161 million for the  year under revie. This is against a profit of N449.456 million  recorded in 2008.

Speaking at the 11th Annual General Meeting (AGM) held in Lagos last weekend, the Chairman of Union Assurance,  Madam Funke  explained that the drop in gross premium was due primarily to the global financial crisis and the banking reforms which affected investors' confidence in the market, resulting in lower returns. She furhter noted that the company paid claims of N672.95 million in 2009, representing an increase by 40.34 per cent from N479.49  million recorded in 2008.

Osibodu disclosed that about N200 billion gross premium income was generated by the industry during the year under review, which represented an increase of 33.5 per cent over the 2008 level.

She noted that the company recorded a marginal increase of 6.49 per cent in its total assets from N7.48 billion in 2008 to N7.96 billion in 2009.A

According to her, no dividend is being recommended due to huge investment in infrastructure development which your company had She promised that next year  the Board will declare  dividend and asked the shareholders to bear with the company.

According to her, ' the year was a challenging one for most insurance companies owing to the adverse effect of the sharp decline in the value of quoted stocks.

However, she said in order to help the market achieve its potentials, the industry regulator, National Insurance Commission (NAICOM) inaugurated a market development and restructuring initiative which sought to promote compulsory insurance.

'Despite the less than stellar performance, management is confident that with the ongoing restructuring program and the increase in economic activity resulting from the financial market reforms, our performance will witness a remarkable improvement in the very near future'.

In furtherance, Funke said the company is planning to tap into the compulsory insurance scheme and acquire capacity to enable the company play strongly in the energy market. 'We expect that new investment horizons will open to enable us diversify our portfolios'.

For future outlook she said the industry will continue to experience capacity squeeze due to stock market losses and liquidity.

'The new regulatory framework proposed by CBN will also require that we fine-tune our bancassurance model to enable us compete effectively' she added.