Insurance

AIICO Insurance records N47.2bn gross premium written in Q3 2020

Fajemirokun

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Chuks Udo Okonta

The Managing Director/Chief Executive Officer, AIICO Insurance Plc, Babatunde Fajemirokun, has spoke on the giant strides recorded by the firm as it achieved a
27 per cent year-on-year growth in gross premiums written in 2020, from N37.0 billion in Q3 2019 to N47.2 billion in Q3 2020.

He noted that the global and local macroeconomic headwinds have continued to test the resilience of the firm’s business, and operating models as well as its business continuity plans and the strength of its relationships with customers and partners.

“Our 3rd quarter results demonstrate that our business remains steady, despite the changing client preferences and risk exposures that have accompanied the COVID-19 pandemic. We have recorded strong top-line growth year-on-year as well as improved contribution from subsidiaries in our Group, especially our asset management business.

“In our core insurance business, we will continue to offer innovative products that help our customers create and protect their wealth while leveraging the latest technology to meet our clients where they are. In addition, strong asset-liability management remains a pillar of our operating model. As a diversified financial services group, we will continue to ensure that businesses across our Group offer attractive products that enable us create value for all stakeholders,” he said.

He said significant movements in investment yields has affected the value of liabilities and assets in the organization’s life business, adding that on the short and long ends of the yield curve, yields have declined by about 5.3 per cent and 2.8 per cent respectively year-to-date.

The effects of these changes, he noted are reflected in the change in life and annuity funds and fair value gains or losses on the income statement, stressing that in addition, changing client preferences mean that there has been a change in our retail product mix.

Some of these products, he noted require higher reserving requirements when sold which also results in an increase in our liabilities, reducing reported profits.

However, the increased contribution to profits from our general insurance and our asset management businesses highlight our strengths as a group. Our general business continues to enjoy the confidence and support of our customers, despite the effects of the pandemic, he posited.

“Our asset management business, AIICO Capital, continues to grow its client base while investing judiciously on behalf of its clients.

“Overall, profit before taxes reduced seven per cent year-on-year, from N5.0 billion in Q3 2019 to N4.7 billion in Q3 2020.

“Profit-after-taxes increased 17 per centyear-on-year to N5.2 billion for the interim period ended September 30, 2020 from N4.5 billion in the corresponding period in 2019,” he said.

The total assets, he said increased 55 per cent year-to-date to N245.8 billion from N159.5 billion in December 2019 driven by an increase in financial assets, including cash and cash equivalents.

He noted that the financial assets increased because of the decline in investment yields and judicious investment of funds received for policies sold.

He maintained that total liabilities increased 63 per cent to N212.6 billion from N130.6 billion in December 2019 driven mainly by increases in insurance contract liabilities (from the decline in yields and reserving for new businesses) and fixed income liabilities (3rd party funds under management) in our asset management business.

Total equity, he said grew 15 per cent year-to-date to N33.2 billion from N28.9 billion in December 2019.

He said the firm’s financial position remains strong, inspiring confidence in its ability to assume the risks customers wish to transfer. “We deploy this capital judiciously, generating risk adjusted returns for our shareholders, and ensuring that we can continue to keep our promises,” he added.

About AIICO Insurance PLC
AIICO Insurance PLC is a leading composite insurer in Nigeria with a track record of serving its clients that dates back over 50 years. Founded in 1963, AIICO provides life and health insurance, general insurance, and investment management services as a means to create and protect wealth for individuals, families and corporate customers.

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