AIICO reports GWP of ₦62bn, grows assets by 52.5% in 2020, denies non-remittance of PAs to PTAD


AIICO Insurance Plc has announced its audited results for the year ended 31 December 2020 which saw the company grow its Gross written premium (GWP) by 23.6% y-o-y to ₦62.0 billion in FY 2020, up from the ₦50.1 billion reported FY 2019.

Managing Director/Chief Executive Officer, Mr. Babatunde Fajemirokun

This is also as the insurance company refuted allegations of non-remittance of pension assets to the Pension Transitional Arrangement Directorate (PTAD).

According to the firm, in a statement by its Head, Strategic Marketing & Communications, Segun Olalandu, the Covid-19 pandemic affected its financial reports negatively, even as the growth recorded within the same period of 2020 is as a result of ‘benefitting from the continued investment in our agency force, an increased focus on partnerships and better relationship with corporates.’

While investment income grew by 13.1% y-o-y to ₦11.7 billion in FY 2020 up from FY 2019 result of ₦10.4 billion from increased assets under management, the company suffered Underwriting loss of ₦36.3 billion (FY 2019: ₦7.7 billion) as a result of two main factors, including; 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.

“Underwriting performance in the general business also declined due to increased claims in our fire (due largely to the civil unrest across the country) and special oil lines.

Under the same period under review, Profit before tax (PBT) from continuing operations declined by 22.6% y-o-y to ₦4.6 billion in FY 2020 (FY 2019: ₦6.0 billion), situation attributed was largely due to the lower-than-expected profits in our Life business as a result of higher-than-expected reserving requirements/low yields.

“However, our General Insurance and Wealth Management businesses increased their contribution to profits,” the firm said.

“Profit after tax from continuing operations declined by 12.9% y-o-y to ₦5.0 billion in FY 2020 (FY 2019: ₦5.7 billion). Profit for the year declined 11.1% y-o-y to ₦5.2 billion in FY 2020 (FY 2019: ₦5.9 billion). Total assets increased by 52.4% to ₦243.1 billion in FY 2020 (FY 2019: ₦159.5 billion). Total liabilities grew by 59.6% to ₦208.4 billion in FY 2020 (FY 2019: ₦130.6 billion). Total equity increased by 19.9% to ₦34.7 billion in FY 2020 (FY 2019: ₦28.9 billion).

Commenting on the results, Managing Director and Chief Executive Officer, Mr. Babatunde Fajemirokun, 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”.

He stated further, “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.”

Meanwhile, the company has moved to respond to allegations of non-remittance of pension assets to the Pension Transitional Arrangement Directorate (PTAD), as it informed the ‘public that all pension assets due for remittance have been duly transferred to PTAD since the year 2017, in full compliance with the directive. Both parties are presently engaged in a reconciliation exercise to conclude the process. ‘

“We implore the public to disregard any information that may suggest otherwise as there are no basis to that effect.

“AIICO Insurance Plc. is and remains a responsible corporate citizen of Nigeria and ensures best practice in all its business activities and operations in line with extant laws and regulatory provisions guiding its practice, a statement issued by Segun Olalandu, the Head, Strategic Marketing & Communications Department, read, Friday.

Leave a Reply

Your email address will not be published. Required fields are marked *