AIICO Insurance Plc, posted a Gross Written Premium (GWP) of N50.1 billion, an increase of 33 per cent overthe N37.7 billion recorded in 2018.
The company’s financial report for the period ended December 31, 2019 shows that its Profit After Tax (PAT) grew by 88 per cent to N5.9 billion as against N3.2 billion recorded in 2018.
AIICO, in a statement made available to Daily Sun, said the result was primarily driven by growth across all lines of business within the Group.
A further breakdown of the report shows the Profit Before Tax (PBT) soared to N6.2 billion, an increase of 78 per cent compared to the N3.5 billon achieved in 2018, while basic Earnings Per Share (EPS) increased by 89 per cent from 44kobo in 2018 to 83kobo in 2019.
With respect to claims payment, AIICO said its gross claims grew by six per cent to N30.6 billion in 2019 from N29.0 billion in 2018 and from this amount, about 75 per cent was for benefits and claims payment in the life business segment, with the remaining 25 per cent incurred in the non-Life business. Also, its total assets grew by 45 per cent to N159.5 billion in 2019 from N110 billion in 2018.
In addition to that, the firm’s shareholders’ equity increased by 92 per cent to N27.9 billion from N14.5 billion in 2018 driven by the successful completion of a private placement investment by two strategic investors (LeapFrog Nigeria Insurance Holdings Limited and AIICO Bahamas Nigeria Limited) and improvements in retained earnings. This has also led to an upward review of the firm’s paid up share capital which rose from N6.1 billion to N11.3 billion with plans underway to raise the outstanding capital by way of a rights issue.
The report also revealed that AIICO recorded an underwriting loss of N6.34 billion in 2019. “This is predominantly driven by the increase in life technical reserves (change in life funds) in the Life business. The Non-Life business achieved N2.4 billion underwriting profit in 2019. This increase in life technical reserves is based on significant growth in new business, impact of changes in yields on federal government securities and assumption changes such as mortality, withdrawal experiences, policy expenses and increased inflation.
“Hence, the underwriting loss of N6.3 billion is a notional loss (non-cash) given the format of insurance accounts used for a composite player in Nigeria. For life insurance businesses, investment income (including the increase in fair value of assets backing life technical reserves) is typically combined with premium income to fund the technical reserves (change in life funds), meet part of claims settlement then contribute to cover expenses and return a profit to shareholders. Therefore, adjusting for investment income for the life insurance business would result in an underwriting profit for the composite insurance operation and the company.”
Commenting on the firm’s performance, the Managing Director/CEO, Babatunde Fajemirokun, said: “Over the course of 2019, we undertook a thorough review of our businesses with a clear aspiration to attain market leadership through profitable growth. Stemming from the progress made so far, it is my belief that we are on course and have the right strategy in place to deliver even more sterling performance in the years ahead.”
On the company’s strategic aspirations, Fajemirokun, said: “ We are in unprecedented times, and only the bold and agile will survive. That is why AIICO will continue to push boundaries to break new grounds and more importantly, we will keep adapting to change, identifying and introducing innovative ways of working and providing our customers with distinctive experiences. This is the only way to succeed in the long term. We remain committed to the full execution of our strategic objectives of becoming a best-in-class lifestyle company and delivering superior value to our shareholders.”