Imperial General readies itself for the future


If there were any lingering doubts as to the positive effects that the 233% increase in minimum capital imposed on insurance companies by their regulator, the National Insurance Commission, is having on their fortunes, the financial performance of Imperial General Assurance Company Limited for 2021 has put them to rest. The company raised new share capital last year, and this brought its total equity to well above the new GH¢50million minimum.

This has propelled a more than doubling of total assets to GH¢66.969million by the end of 2021, up from GH¢28.522million a year earlier on the back of a 57.19% increase in gross premiums and a 44.3% increase in net earned premiums.

Board Chairman of Imperial General, Ivan Avereyireh – speaking at the 2022 Annual General Meeting of the company held earlier this week at the Group head office, revealed that it is upgrading its human resource capacity by bringing in sound technical hands and savvy marketers to make Imperial the preferred general insurance brand.

Actually, though, Imperial Genera’s outstanding headline financial performance figures for 2021 overshadow two key factors and illustrate just how clearly the company’s management has seen into the future.

One is the company’s ongoing emphasis on marine insurance. Although still the lowest premium earner among the six classes of insurance cover Imperial General offers, its gross premiums from marine cargo grew by 29% last year. This focus may prove crucial going forward, as a new impending Marine Cargo Act now before Parliament will make it compulsory for importers in Ghana to insure their goods with local insurers; thus providing the potential for this class of insurance to easily become the fastest-growing source of premium income from 2023 onward.

The other factor is size and structure of the company’s investment portfolio.  Driven by its recapitalisation last year, Imperial’s financial investment portfolio grew by 211%. But even more instructively, the company’s portfolio is entirely in fixed deposits with commercial banks rather than even partly in government Treasury bills and bonds. This means that the impending restructuring of Ghana’s public debt – involving a ‘hair-cut’ for investors in such investments – won’t affect Imperial General as it will most other institutional investors, since they are nearly all heavily invested in such public domestic debt securities.

But it is the company’s headline financial performance figures that will catch the attention of stakeholders, simply because they are so good.

Net income rose by 34.49% last year.

Despite inevitable increases in both commission expenses and gross claims expenses (which increased by 33.92% in 2021) net insurance benefits and claims increased significantly by 23.99%.

In turn this allowed the company’s pre-tax profits to rise by 52.58%. Ultimately, profit after tax nearly doubled… rising by 81.25% in 2021.

Recapitalisation and prudent use of its increased financial strength has made for a more profitable Imperial General, and this has been achieved based on its much bigger size. Propelled by recapitalisation, the company’s total assets grew by 137% last year.

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