AIICO Insurance plc has reverted to the path of profitability as the underwriting firm is aggressively seeking expansion activities across Nigeria with a view to increasing its market share.
For the year ended December 2014, AIICO posted a profit after tax (PAT) of N2.23 billion from the 759.23 million losses it recorded in the corresponding period of (FY) 2013.
The impressive performance means bumper dividend awaits shareholders of the company.
The growth trajectory at the topline was fuelled by a 29.96 percent increase in investment income, a 60 percent decrease in claims expenses recovered from reinsurance and a 24.51 percent reduction, a total underwriting expenses to N12.85 billion in 2014 as against N17.01 billion in 2013.
However, employer benefits expenses spiked by 52.93 percent to N3.05 billion in 2014 from N1.98 billion in 2013, while other operating expenses increased by 8.69 percent to N3.05.
AIICO Insurance is unrelentingly pursing organic and inorganic growth strategy as way of increasing its share of N80.22 trillion ($510bn) Nigerian economy.
The International Finance Corporation (IFC), a member of the World Bank Group, has announced a grant of N3.8 billion ($20m) convertible loan to AIICO Insurance.
These loan facilities will enable the underwriting firm upturn its agency network and retail centres and increase its reach and footprint across the country.
The facility will also strengthen its information technology platform to achieve greater efficiency in claims processing and customer services.
In 2013, AIICO won the marketing magazine and marketing world award as the Insurance Brand of the year due to its underwriting excellent in Nigeria.
Its underwriting capacity is quite weak as gross premium income (GPI) moved by 12.40 percent to N20.42 billion in 2014 as against N23.31 billion in 2013, while net premium income fell by 10.97 percent to N16.22 billion as against N18.22 billion in 2013.
The underwriting firm has increased its assets base as total assets surged by 38.47 percent to N58.33 billion in 2014 from N42.10 billion as of December 2013. The impressive performance is not a reflection of the insurance industry.
The sector’s contribution of less than 1 percent in the last rebased GDP estimates highlights the challenges of insurers in Africa’s largest Nigeria.
Analysts have identified lack of awareness on the part of people about the benefits of insurance and the inability of insurers to introduce innovative and market driven products as the major impediments to the growth of insurance business in Nigeria.
The company’s share price closed at N1.04 – April 29, 2015, on the floor of the exchange, while market capitalisation was N7.34 billion.
BALA AUGIE
