AIICO Insurance has released its Q3, 2020 results showing 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.
Babatunde Fajemirokun, The Managing Director and Chief Executive Officer, said:
“Global and local macroeconomic headwinds continued to test the resilience of its business, and operating models as well as business continuity plans and the strength of our relationships with our customers and partners.
Fajemirokun said the firms 3rd quarter results demonstrated that its business remained steady, despite the changing client preferences and risk exposures that have accompanied the COVID-19 pandemic, adding, “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.”
Continuing,he said, “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.”
According to the the result the firm reported 27% year-on-year growth in gross premiums written in 2020, from N37.0 billion in Q3 2019 to N47.2 billion in Q3 2020.
Significant movements in investment yields also affect the value of liabilities and assets in its life business.
On the short and long ends of the yield curve, yields have declined by about 5.3% and 2.8% respectively year-to-date. The effects of these changes are reflected in the change in life and annuity funds and 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 when sold which also results in an increase in our liabilities, reducing reported profits. However, the increased contribution to profits from its general insurance and asset management businesses highlight the company’s strengths as a group. Its general business enjoyed the confidence and support of customers, despite the effects of the pandemic.
According to the MD, 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 7% year-on-year, from N5.0 billion in Q3 2019 to N4.7 billion in Q3 2020.
• Profit-after-taxes increased 17% year-on-year to N5.2 billion for the interim period ended September 30, 2020 from N4.5 billion in the corresponding period in 2019.
• Total assets increased 55% 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. Financial assets increased because of the decline in investment yields and judicious investment of funds received for policies sold.
• Total liabilities increased 63% 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 grew 15% year-to-date to N33.2 billion from N28.9 billion in December 2019.
Our financial position remains strong, inspiring confidence in our ability to assume the risks our 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.”