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Wednesday, March 29, 2023

AXA Mansard Surmounts Covid-19 Headwinds as Net Income Surges 168.72 percent

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AXA Mansard Nigeria Plc has overcome coronavirus pandemic headwinds that disrupted business activities across key Nigerian cities as the insurer recorded improved underwriting conditions and strong profitable growth.

The most capitalized insurer in Africa’s largest economy said earnings growth was driven by its focus on partnering with its customers as well as sustained operational efficiencies.

AXA Mansard achieved excellent underwriting capacity as underwriting profit spiked by 63.40 percent to N7.01 billion in September 2020 from N4.29 billion as at September 2019.

Combined ratio fell to 96.35 percent in the period under review from 96.77 percent the previous year, which means the company generated more premium income than it has paid out in claims.

While the insurer’s health business remains the fastest growing, the commercial lines continue to hold its share of the market.

The insurer is taking advantage of the country’s huge population that crave for consumption as its retail segment also continues to garner momentum. That means it is diversifying its customer base from corporate to the retail end of the market.

Net premium income spiked by 24.15 percent to N23.75 billion in the period under review as against N19.13 billion the previous year. Revenue from the Health insurance otherwise known as HMO hit N15.92 billion as at September 2020.

As a result of premium growth, cost optimization and efficiency, net income surged by 168.72 percent to N5.67 billion in September 2020 as against N2.11 billion the previous year.

AXA Mansard saw a 14.93 reduction in investment income to N3.93 billion, and there could be a steeper drop in the fourth quarter as the accommodative policy of the central bank resulted in declining yields on treasury instruments.

The company is meeting obligations to policy holders even amid a tough and unpredictable macroeconomic environment as total claims stood at N14.34 billion, that presents a 22.98 percent increase from 2019’s N11.66 billion.

Total management expenses were up 4.63 percent in the period under review, which is lower than 13.71 percent September inflation figure.

Analysts have warned that the broader fallouts from the pandemic in terms of lower demand and investment returns, deterioration in the credit quality of fixed income securities and increased mortality rates from the virus could pressure earnings, reserves, and profitability of the life insurance sector in 2020.

The insurance sector of the Nigerian economy contracted by 28.15 per cent in the second quarter of the year, according to the third quarter GDP report.

AXA Mansard is a member of the AXA Group, the worldwide leader in insurance and asset management with 166,000 employees serving 107 million clients in 64 countries.

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