NIA Finances Nose-Dive, Record N7m Deficits
The umbrella body of underwriting firms operating in the country, Nigerian Insurers' Association (NIA) has recorded a 7.23 million shortfall in its income from its activities last year while its membership has continued to decline in recent times.
The association's finances worsened from its 2002 position with the funds employed crashing by 12.13 percent from N73.52 million in 2002 to N64.6 million in 2003.
The Income and Expenditure Account of the association unveiled at its 33rd Annual General Meeting in Lagos recently revealed that the income generated by the association last year depreciated by 1.96 percent. It fell from N52.06 million in 2002 to N51.04 million in 2003.
The above notwithstanding, the expenditure of the organisation continued to maintain an inverse relationship with its income. The association's expenditure rose by 39.30 percent from N41.81 million in 2002 to N58.28 million in 2003.
The above resulted in a deficit last year. This precarious financial position saw the organisation's finances declining from a N10.26 surplus income in 2002 to N7.23 million income deficit in 2003.
In the same manner, the association's Balance Sheet painted a gory financial picture as almost every vital indices nose-dived within the period under consideration.
The association's fixed assets fell by 7.23 percent from N49.81 million in 2002 to N46.21 million in 2003. Its investments crashed by 22.04 percent, declining from N13.61 million the previous year to N7.78 million last year.
The sum total of Funds Employed by the association likewise crashed by 12.13 percent, falling from N73.5 million the previous year to N10.61 million last year. The above is accounted for by a 2.64 percent reduction in special funds and a 73.58 percent fall in general reserves.
The general reserves of the organisation crashed from N9.84 million in 2002 to N2.6 million in 2003 while its special fund got depleted from N63.68 million in 2002 to N62 million in 2003. the reduction was used to fund the income deficit depicted in the Income Statement.
However, the association's net current assets showed an improvement. It increased by 9.9 percent, rising from N10.1 million the previous year to N10.61 million last year.
The crash in its financial position could be explained by the reduction in the association's membership. This fell by 7.55 percent, falling from 106 in 2002 to 98 in 2003. In the year under consideration, the association suspended 11 member companies.
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