Profit & Loss 2010

CHAIRMAN'S STATEMENT

Distinguished fellow Shareholders, Ladies and Gentlemen, It is my pleasure to welcome you to the 31^st Annual General Meeting of our Company, LASACO Assurance Plc holding here today in the “Living Spring” State. You will recall we made a promise to you at the last Annual General Meeting that we would open up the frontiers of our interaction with all stakeholders at all levels to reflect our national outlook. Our presence here is in fulfillment of that promise. We shall also continue to look at the possibility of rotating our Annual General Meetings within the six geopolitical zones of the country at least once in every 3/5years as we continue to grow and transform the Company.

BUSINESS ENVIRONMENT

The year 2010 witnessed tedium of challenges in the global economy ranging from increasing sovereign debt profiles of countries like United States, Portugal, Ireland, Italy, and Greece to such an extent that this development casts doubt on security of Investment and growth to the successful introduction of the YUAN as a global currency replacing the U.S. Dollar for international trade purposes. With this, China devalued U.S. Dollars buying power by 30%.

The business environment within Nigeria during the year under review was predicated primarily on developments in the major sectors such of petroleum, manufacturing and marine. The year saw the likely passing into law of the Petroleum Industry Bill which some players within the sector believed would engender increase of activities and growth among others if the Bill was passed into law by the end of the year. As at year end, the issue was still being hotly debated.

The contribution of the manufacturing sector to the economy in 2010 was below that of 2009. it declined from N183.8 billion in the first half of 2009 to N165.7 billion for the same period last year. The investments profile of the sector during the year 2010 also reflected a sharp decline, from N1,280.592 billion in 2009 to N360.232 billion in 2010 also reflected a sharp decline, from N1,280.592 billion in 2009 to N360.232 billion in 2010. The sector’s contribution to gross domestic product was 4.19% in 2010 compared to about 5% in 2009.

Manufacturing capacity utilization also decreased from 47% in 2009 to 43% in 2010. Also, 2010 witnessed the introduction of the Cargo Tracking Note (CTN) by the Nigerian Ports Authority (NPA) using security platform with attendant increase in cost of shipment to Nigeria as well as cost of doing business by manufacturers. There was 45% increase in raw material procurement cost as well as increase in interest rate from 12% to 26% for normal business as well as reduction in working capital among other negative economic indicators.

In the Marine sector, analysts had believed that the year under review would witness a significant implementation of the Cabotage Vessel Financing Fund which was to be effected through designated banks; there would be improved performance as well as significant increase in activities within the sector. However, the Fund was not disbursed throughout 2010 and as such, the opportunities that were hitherto anticipated as a result of the implementation of the Cabotage Act did not materialize. It is against the above background that the performance of our company could be viewed for 2010.

OUR PERFORMANCE/OPERATIONAL RESULTS

No question about it, the difficult Nigerian economic climate in 2010 was very difficult and tough. Coupled with global political and economic instability, our Company faced many challenges but was still able to record a profit though marginal. Our gross premium income was N2.045billion as against N3.302billion in year 2009, a decline of N1.257billion or 38.07%. Premium Earned, also went down from N2.366billion in 2009 to N1.628billion in 2010 or less by 31.19%. This was mainly due to loss suffered on some lines of business during the year.

Total Claims incurred by our company in 2010 was N406.185million compared to N414.613mllion in 2009. Our Profit before tax was N332.560million in 2010 compared to N658.916million in 2009, a deficit of N336.316million or 51% versus 2009. Profit after tax in 2010 was N249.658million as against N498.231million in 2009 a drop of N248.573mllion or approximately 50%.

These results largely reflect the impact or poor performance of the national economy, loss of businesses to stiff competition and discounted rate cutting in the industry and the global economic meltdown.

The Year 2011 is beginning to go like 2010, however, we as a Company expect to perform better and report improved results for 2011 as we aggressively pursue the several strategic programmes we have put in place to improve performance and profits.

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