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…premiums written grows 28.7% to N31.7 billion
AIICO Insurance Plc, has announced its unaudited results for the interim period ended 31 March 2023, showing growth in IFRS 17 revenue to N14.8 billion.
Under the IFRS 4 standard, premiums written grew 28.7% year-on-year to N31.7 billion (Q1 2022: N24.7 billion).
Gross premiums, represent the cash an insurer has received over a period and not
actual revenue. IFRS 4, in permitting this, allows insurers to recognize profits from long-term contracts on day one.
AIICO Insurance’s retail life business, which contributed close to 50% of premiums during the quarter, is predominantly made up of long-term contracts, some of which may be in force for over 20 years.
“We are proud to retain the trust of our customers despite the challenging economic environment in the first quarter of 2023. It is a testament to the investments we have made in improving our value proposition, productivity and embedding digital across our organization. We continue to see improvements in the performance of our parent and subsidiary businesses, furthering our ambition to be a diversified financial services group,” Babatunde Fajemirokun, the Managing Director and Chief Executive Officer said.
“The introduction of IFRS 17 as the standard for insurance reporting heralds a shift, not just in the way we report, but how investors and analysts should examine the fundamentals of a sustainable insurance business” said Oladeji Oluwatola, AIICO Insurance’s CFO.
“With this new standard, the investing public can better compare results between firms, regardless of their business model or the types of products they sell, a key improvement from the previous IFRS 4 standard.”
The company proposed a dividend of 3k per share to shareholders based on results from the 2022 fiscal year.
Profit before income tax from continuing operations increased 50.1% to N1.4 billion in Q1 2023 (FY2022: N0.9 billion).
The company’s continuing operations have benefited from improved asset-liability management and risk selection, especially in its corporate business, which have reduced the volatility of the company’s financial position.
Profit for the period declined to N1.4 billion (Q1 2022: N4.3 billion) due solely to the profits earned on the sale of AIICO’s pensions business in 2022.
Review of statement of financial position
Total assets increased by 2.2% to N280.6 billion as of Q1 2023 (FY 2022: N274.6 billion) driven mainly by an 87.7% growth in cash and cash equivalents, which constitutes about 10.6% of the total assets.
Total liabilities increased by 2.2% to N236.0 billion as of Q1 2023 (FY 2022: N230.9 billion).
This was driven mainly by a 21.8% growth in fixed income liabilities relating to non-pension asset management business. It constitutes 11.8% of the total liabilities.
Total equity increased by 1.9% to N44.6 billion as of Q1 2023 (FY 2022: N43.7 billion) mainly due to a 5.3% increase in retained earnings to N16.1 billion as of Q1 2023 (FY 2022: N15.3 billion).