Cilla Financial Security

*REASON BEHIND SUDDEN RALLY IN INSURANCE STOCKS IN THE NIGERIAN CAPITAL MARKET*

Insurance industry is one of the most underrated, undervalued and underestimated sectors in the *NIGERIAN EQUITY MARKET*. Most of the insurance companies quoted in the *NIGERIAN EXCHANGE GROUP* are undercapitalized which explains the reason why they have alot of penny stocks that are selling below * #5* in the Nigerian stock market not necessarily gross undervalued in terms of price to earnings growth ratio because a stock can be selling for * #2* doesn't mean it is cheap compare to another Stock selling for * #1550*. For instance, PRESCO shares is selling for * #1480* with PEG *0.09x* showing that the stock is grossly undervalued. Simply wall street valuation price for PRESCO Stock is * #1800* but the stock is selling at a discount * #1480*.

Similarly, Aiico Insurance stock is trading at * #3.50* with PEG of *-0.38* indicating that the stock is grossly overvalued since earnings growth rate is negative. AIICO stock is trading at premium of * #3.50* making it more expensive than PRESCO Stock which is trading at a discount of * #1480*.

The sudden rally in *insurance stocks* in the Nigerian Equity Market over the last five trading days is deriven by *Insurance Reform Bill* which was signed into law by President Tinubu to transform the entire insurance industry where insurance companies we embark on recapitalisation so as to meet up international standard.

It is this singular reason that caused investors to develop strong appetite towards insurance stocks based on positive market sentiments. Infact many insurance stocks like *Sovernin Trust insurance, Linkassure, Veritaskap, Univinsure* have been on full bids in the market without corresponding offers.The excess demand for insurance stocks over supply put the prices of those stocks in upward trajectory, many investors in an attempt to catch early bird with insurance stocks dumped their blue-chip stocks to rebalance portfolio with insurance Penny

AIICO Insurance Plc, one of Nigeria's leading insurance providers, currently has a market valuation of approximately NGN 44.29 billion.

The company has shown solid financial health, with notable returns such as a profit margin of 15.44% and a return on equity (ROE) of 31.31%, reflecting its efficient use of capital.

Additionally, it offers diverse services across life and non-life insurance, health management, pensions, and asset management.

Recently, AIICO has been focusing on adapting to Nigeria's economic environment by managing expenses amid inflation and high interest rates, which have influenced its performance.

I am Asogwa Oluchukwu Prisca
I am a retirement and Children Education Consultant

Protect what you value

Before you go on a shopping spree for 11.11 sale, ask yourself have you bought all these 4 PRODUCTS yet? 🤔

These few months at home, many of us are doing a lot of online shopping. But how many of us really spend our hard earn money on financial products that can give us a peace of mind?

Well… maybe 5%? Maybe not at all?

You see nobody likes to talk about death… nobody likes to talk about illnesses… nobody likes to discuss about what happens if an accident occurs and you’re unable to work… and nobody would IMAGINE the amount of people who lost their jobs this year. 😢😢

But! We are seeing incidents like this happening around us every day and we probably try to convince ourselves saying “This will not happen to me!”

There is also a group of people who actually tried to research a little about insurance and got confused when they try to buy insurance because it seems like there are thousands of products, am I right?

Let me share with you:

=== The 4 TYPES Of Insurance Products ===

You see, at the end of the day there are effectively only 4 TYPES of insurance products you can buy and the best time to buy it is TODAY. ✅

YOU die, I pay → This relates to life coverage products
YOU fall sick, I pay → This relates to income protection products.
YOU retire, I pay → This relates to retirement planning products
YOUR kids go to college, I pay → This relates to kids education products.

📌 Ask yourself, which is most important for you right now?

Which one requires your immediate attention?

=== What to do next? ===

To sum it up, don’t roll the dice and say “this will not happen to me” so make sure you are fully covered.

Before you spend it on something like the 11.11 sale, take some time to think should you spend that money on better financial coverage for you and your family?

Take the initiative to text your advisor and check with them if you are fully covered or if you have the products mention above. If no, find time to find out more about them.

Every professional advisor in the financial planning industry will know that their clients’ priorities changes drastically during the year end due to them planning for 2021. That is why they are being responsible and checking if you’re fully covered and financially ready to kick start 2021!

Remember, the best time to buy insurance is yesterday because you never know what will happen today! 🙌🏻