By Cynthia Ezekwe
AIICO Insurance Group, a leading insurance, pensions management, and asset management company in Nigeria, recorded a 28.1 percent year-on-year increase in group revenue to N14.8 billion in Q1 2023, an increase from N11.5 billion recorded in the same period last year.
According to the company’s unaudited financials for the first quarter of 2023, the insurance group recorded a 28.7 percent growth in premiums written to N31.7 billion under the International Financial Reporting Standard 4 (IFRS 4).
The financials showed that the insurance service result, which is the insurance revenue with fewer expenses, increased by 318.0 percent to N1.95 billion in Q1 2023, up from N466 million in Q1 2022, primarily due to the increase in revenue during the quarter. Similarly, the total income, or net insurance and investment, grew by 4.9 percent to N4.7 billion compared to N4.5 billion in Q1 2022.
However, profit before income tax from continuing operations declined by 12.3 percent to N1.4 billion in Q1 2023 compared to N1.6 billion in the first quarter of 2022.
AIICO Insurance said its continuing operations have benefited from improved asset-liability management and risk selection, especially in its corporate business. This has reduced the company’s financial position volatility, which is expected to persist over time.
Also, total assets increased by 2.2 per cent to N280.6 billion, driven mainly by an 87.7 percent growth in cash and cash equivalents, constituting approximately 10.6 percent of the total assets. Total liabilities also increased by 2.2 percent to N236.0 billion due to a 21.8 percent growth in fixed income liabilities relating to the company’s non-pension asset management business, while total equity increased by 1.9 percent to N44.6 billion, mainly due to a 5.3 percent increase in retained earnings to N16.1 billion as of Q1 2023.
Babatunde Fajemirokun, the managing director and chief executive officer, AIICO Insurance, noted that the company’s stellar performance despite the challenging economic environment in the first quarter of 2023, is a testament to the investments the company made in improving its value proposition, productivity and embedding digital across its organisation.
Commenting on the new IFRS 17 standard for insurance reporting, Oladeji Oluwatola, AIICO Insurance’s chief financial officer (CFO), said, “The new reporting standard heralds a shift, not just in how we report, but how investors and analysts should examine the fundamentals of a sustainable insurance business.”
Oluwatola added that the new standard will enable the investing public to compare results between firms better, regardless of their business model or the types of products they sell,which is a key improvement from the previous IFRS 4 standard.
