AIICO Insurance Plc has forecast that profit would hit a record in the third quarter (Q3), thanks to improvement in the yield environment and recovery from the coronavirus pandemic.
In a statement on the Nigerian Stock Exchange Limited, the largest listed company by total assets, said it expects net income to hit N2.99 billion in the third quarter.
That is 23.55 percent higher than the N2.42 billion the corresponding period of 2021.
The insurer also forecast gross premium income (GPI) of N60.34 billion in the third quarter, and that is 17.37 percent higher than 2021’s N51.44 billion.
The positive prognosis is predicated on rising bond yields that usually bolster investment income of insurers who had already packed their money in fixed income investment.
The Nigeria 10 year government bond has an 11.148 percent yield, according to data from World Government Bonds.
That compares with a yield of 4.48 percent as at November 2020 and 5.10 percent in July. Investment income will be driven largely by our bond investments and our investment in other short term financial assets.
Of course, AIICO Insurance expects investment income of N10.07 billion in September 2022, which is higher than 2021’s N9.53 billion.
It envisages mounting obligations due to inflationary pressures, currency devaluations, and the reopening of the economy that underpinned claims.
The insurer has been honoring obligations to its customers even amid unfavorable underwriting conditions.
AIICO forecasts claims expenses of N34.09 billion, which is higher than 2021’s N30.16 billion in the corresponding period of 2021.
The largest insurers in Africa’s most populous nation were hit by a N154.04 billion fair value loss on investment in 2o21, according to data gathered by MoneyCentral.
AIICO Insurance Plc made a profit of N4.73 billion in the first quarter 0f 2022, by far the best results in its history as the insurer benefitted from the sale of its pension business.
Net income surged by 207.14 percent to N4.73 billion in March 2022 from N1.54 billion as at March 2021. The growth in profit was due to a N3.38 billion proceeds from the sale of its pension business.
The insurer sold AIICO Pension Managers to FCMB Pensions Limited for a consideration of N4.06 billion to concentrate more on its core business.