“We have recorded strong top-line growth year-on-year as well as improved contribution from subsidiaries in our group, especially our asset management business.”
That is the assertive expression of the managing director and chief executive officer, AIICO Insurance Plc, Babatunde Fajemirokun, on the company’s performance up and until September, 2020.
Fajemirokun said the company’s windbreaks was able to stop contrary pointers as “global and local macroeconomic headwinds continue to test the resilience of our business, and operating models as well as our business continuity plans and the strength of our relationships with our customers and partners.”
The outcome of this AIICO chieftain noted, was that “our business remains steady, despite the changing client preferences and risk exposures that have accompanied the Covid-19 pandemic.”
This he said was demonstrated by the upswing in its core insurance business where it continues “to offer innovative products that help our customers create and protect their wealth while leveraging the latest technology to meet our clients where they are.”
Leaning on its ace operating model: strong asset-liability management, he said the company shall continue to ensure that businesses across the group “offer attractive products that enable us create value for all stakeholders.”
A breakdown of the released up-to date performance showed that it recorded 27% year-on-year growth in gross premiums written in 2020 from N37bn in Q3 2019 to N42.2bn in Q3 2020.
The company also noted significant movements in investment yields, which affected the value of liabilities and assets in the life business, stating that the yield curve on the short and long term ends have declined by about 5.3% and 2.8% respectively year-to-date. “The effects of these changes are reflected in the change in life and annuity funds and fair value gains or losses on the income statement,” adding that changing client preferences mean that there has been a change in the company retail product mix.
AIICO statement noted that some of these products require higher reserving requirements when sold which also results in an increase in its liabilities, “reducing reported profits.” However, this pale tick is overturned by increased contribution to profits from the general insurance and the asset management business “highlight our strength as a group.”
Its overall profit before taxes reduced 7% from N5bn to N4.5bn, while profit after taxes increased 17% to N5.2bn from previous N4.5bn. Further increases were recorded in total assets, it moved from its position in December 2019 at N159.5bn to present N245.8bn, registering 55% year to date and this was attributed to increase in financial assets, including cash and cash equivalents.
Also, total liabilities increased 63% to N212.6bn from N130.6bn in December 2019, “driven mainly by increases in insurance contract liabilities (from the decline in yields and reserving for new businesses) and fixed income liabilities (3rd party funds under management) in our asset management business.” Besides, total equity drew 15% year-to-date to N33.2bn from N28,9bn in December 2019.
With this performance secured AIICO declares: “Our financial position remains strong, inspiring confidence in our ability to assume the risks our customers wish to transfer. We deploy this capital judiciously, generating risk adjusted returns for our shareholders, and ensuring that we can continue to keep our promises.”