AIICO posts ₦62bn Gross Written Premium in full year 2020

Mr. Babatunde Fajemirokun, MD/CEO, AIICO Insurance 

AIICO Insurance Plc (“AIICO”, or “the Group”) has announced its audited results for the year ended 31 December 2020.

Highlights of the company’s performance showed that gross written premium grew by 23.6% year on year to ₦62.0 billion in 2020 higher than ₦50.1 billion recorded in 2019. The feat was ascribed to benefits from the continued investment in their agency force, an increased focus on partnerships and better relationship with corporates.

Underwriting loss of ₦36.3 billion which is higher than ₦7.7 billion recorded in full year 2019, was traced to two main factors, namely, reserving requirements for new policies underwritten in the life business in 2020; and changes in actuarial reserves in the life business for policies written in 2020 and prior years.

“There were significant movements in investment yields which affected the value of liabilities and assets in our Life business. On the short and long ends of the yield curve, yields declined by about 7.7% and 5.5% respectively in 2020. The effects of these changes are reflected in the change in life and annuity funds, as well as fair value gains or losses on the income statement. In addition, changing client preferences mean that there has been a change in our retail product mix. Some of these products require higher reserving requirements which results in an increase in our liabilities, thereby reducing reported underwriting profits,” firm stated.

According to the statement signed by Head, Strategic Marketing & Communications Segun Olalandu, and made available for this medium today, “underwriting performance in the general business also declined due to increased claims in her fire (due largely to the civil unrest across the country) and special oil lines whilst Investment income grew by 13.1% to ₦11.7 billion in full year 2020 (FY higher than ₦10.4 billion made in full year 2019 from increased assets under management.”

The company’s profit before tax from continuing operations, the statement stated, declined by 22.6% to ₦4.6 billion in full year 2020 when compared with 2019 full year figure of ₦6.0 billion which the company said was largely due to the lower-than-expected profits in its Life business as a result of higher-than-expected reserving requirements/low yields, adding however that her General Insurance and Wealth Management businesses increased their contribution to profits.

It stated that profit after tax from continuing operations declined by 12.9% to ₦5.0 billion in 2020 when compared with ₦5.7 billion recorded in 2019, even as profit for the year also declined 11.1% to ₦5.2 billion in full year 2020 when compared with the 2019 full year figures of ₦5.9 billion.

The company’s total assets, according to the statement, increased by 52.4% to ₦243.1 billion in full year 2020 higher than ₦159.5 billion recorded in full year 2019 while total liabilities grew by 59.6% to ₦208.4 billion in full year 2020 higher than ₦130.6 billion posted in 2019 full year just as the firm’s total equity increased by 19.9% to ₦34.7 billion in 2020 higher than 2019 full year figures of ₦28.9 billion.

• Commenting on the results, the statement stated, Mr. Babatunde Fajemirokun, the Managing Director and Chief Executive Officer said, “The pandemic caused fundamental assumptions about the global marketplace to be questioned and led to a global economic upheaval. The Nigerian economy slipped into its second recession in five years, with the business environment further impacted by incidents of civil unrest.

“Despite these unprecedented macroeconomic disruptions, AIICO grew its total assets by 52.5% in the year under review. We delivered sound results having taken decisive early actions to protect our workforce, improve our financial strength, streamline operations and reinforce our distribution strategy.

“Over the past 5 years, we invested substantially in human capital and technology to significantly elevate our customer experience. This resulted in our gross written premiums growing 23.6% year-on-year despite restrictions caused by the pandemic. Our financial position remains strong, inspiring confidence in our ability to assume the risks our customers wish to transfer. Our investors echo this faith as our rights issue announced in September 2020 was oversubscribed by about 26%. We deploy this capital judiciously, generating risk-adjusted returns for our shareholders, and ensuring that we can continue to keep our promises,” he added

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