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AIICO Insurance Plc’s group-wide underwriting profit has grown by 326 percent in the 2016 financial year, driven by improved risk management measures that have driven efficiency across its business units.
The underwriting profitability increased from a loss of N5.5 billion in 2015 to a profit of N12.45 billion across the group driven by slight underwriting improvements in the non-life business and release of the reserves in the life business.
“The strategic decision to reduce premiums written in the long-term business (retirement product) due to higher market risks and also the decision to turn down some unprofitable and low-return insurance premiums enhanced the underwriting profits,” said Edwin Egbiti, managing director and chief executive officer of the Lagos-based insurer.
The company’s strategy had affected its written gross premium, which fell 17 per cent to N27.1 billion at the end of 2016 financial year from N32.9 billion in 2015, left the company in better position to manage its long term risks, said Egbiti.
The biggest life insurer by assets had adopted the strategic decision to diversify the long-term business to include protection and endowment products. The managing director said that this line of business increased by 36 per cent in 2016.
Total assets shed 3.35 per cent in 2016 to stand at N77.5 billion, dragged by a reduction in the value of financial income assets and onetime expenses that decreased cash holdings and financial assets.
Actual investment income appreciated by 27 per cent, growing to N7.2 billion as at the year ended 31 December 2016, from N5.7 billion in 2015.
The company’s boss said that the firm’s gross premium income surged 188 per cent during the period as reclassified annuity reserves shrunk unearned premiums in its income statement and boosted profits.
Egbiti said that the company’s asset management capabilities continue to be a key strength for the company following its outstanding performance in investment income from high yield.
“The firm will continue to engage with its partners to ensure that it finds a mutually beneficial ways to work with one another.”
“We will continue to focus on improving efficiency across the company’s businesses while embedding a culture of rigorous performance management and investment in our people to increase human capital.”
AIICO appreciated 3.70 per cent to close at N0.56 as last week’s trading ended on The Nigerian Stock Exchange on Friday.
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