NIC Profit Doubles as General Cover Soars

NATIONAL Insurance Corporation (NIC) pre-tax profit has more than doubled, being pushed up mainly by proceedings from the general insurance portfolio.

NIC, the state-owned insurance firm, said in its financial statement that the pre-tax profit jumped from 33.65bn/- realized for a year ending June 2020 to 73.1bn/- of last June.

The general insurance raked in a pre-tax profit of 64.97bn/- compared to 8.12bn/- generated from life insurance at the end of June 2020.

NIC, the first insurance company in the country established in 1963, had a net written premium of 57.49bn/- against 45.47bn/- at the end of June 2020.

The profit also went up as management cut expenses especially on administrative and acquisition costs by almost 5.0 per cent to 41.35bn/- from 43.49bn/-.

The Corporation's total assets, year-on-year, grew exponentially to 391.49bn/- at the end of last June from 350.35bn/- pushed mainly by treasury bonds and investment properties.

The investment in treasury bonds ballooned from 50.07bn/- in 2019/20 to 108.1bn/- in 2020/21 while properties shot from 93.1bn/- to 113.9bn/-.

The re-insurers share of insurance contract provision also supported total assets growth after jumped from 11.91bn/- to 16.79bn/-.

Thus NIC cemented its market position due to a sound asset base and good reinsurance arrangement, which gives a large underwriting capacity.

The corporate underwriting is well and adequately protected by the most solid yet advanced and first-class international reinsurance partners through both treaty and facultative reinsurance.

The Controller and Auditor General (CAG) said in his 2020/21 report that NIC was among 16 state-owned enterprises that has inadequate working capital and hence relied on loans.

The report advised the institutions to seek funds from the government to increase their capital so that they can do their loans on time.

The CAG warned that the high debt ratio for capital, among other things, was due to increased loans and costs after the failure of paying loans and interest rates on time.