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.
There was an improvement in underwriting results achieved through disciplined underwriting across all business segments, strong revenue growth, and reduction in expense ratio that means the largest listed insurer by total assets earns more in premium than claims it pays.
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.
Combined ratio improved to 94.63 percent in March 2022 from 107.66 percent the previous year. It posted real underwriting results of N905.70 million as at March 2021, and that compares with a negative result of N1.08 billion the previous year.
The combined ratio is typically expressed as a percentage. A ratio below 100 percent indicates that the company is making an underwriting profit, but even if the combined ratio is above 100 percent, a company can potentially still be profitable because the ratio does not include investment income.
The gradual improvement in the yield environment is a boon for AIICO Insurance as income from fixed income securities increased by 35.66 percent to N3.69 billion as at March 202, which also supported profit growth.
Committed to its mandate and obligations, AIICO Insurance has continued to provide succor to policyholders as it paid a whopping N11.08 billion in the first quarter of 2022.
While it considers a variety of metrics when assessing the quality of its services, for a lot of its customers, especially retirees, paying claims and benefits when they are due is often the key determinant of the quality of their experience.
The insurer is spending less on claims expenses to generate premium income as claims ratio fell to 65.65 percent in the period under review from 77.37 percent the previous year.
Total expense ratio reduced to 28.95 percent in the period under review from 30.28 percent the previous year; thanks to control measures put in place by the management and board of directors.
Analysis of AIICO Insurance revenue line shows both Life and Non-Life segments were the major driver of growth as Life insurers have benefited from rising bond yields and low mortality rates ever since the coronavirus pandemic slowed down on its rage
Gross premium written (GPW) was up 25.41 percent to N24.66 billion in March 2022 from N19.69 billion the previous year.
A breakdown of top line (GPW) shows gross premium from Life (Individual and Group) spiked by 20.97 percent to N14.71 billion as at March 2022. The insurer posted a profit of N2.86 billion from the Life segment, which is 115.90 percent higher than 2020’s N1.32 billion.
Premium income from Non- Life business increased by 24.46 percent to N8.75 billion in the period under review from N4.34 billion the previous year. Profit from the segment surged by 308.64 percent to N1.51 billion in March 2022 from N38.41 million as at March 2021.
AIICO Insurance is a leading composite insurer in Nigeria with a record of accomplishment of serving its clients that dates back over 50 years. Founded in 1963,
AIICO provides life, health, general and investment management services to create and protect wealth for individuals, families, and corporate customers.