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British institute certifies AIICO Insurance

AIICO Insurance implements IFRS 17 in 2023

Lagos, Oct. 10, 2023 : AIICO Insurance Plc says it has commenced the full implementation of the International Financial Reporting Standards 17 (IFRS 17) in its 2023 financials, as directed by the National Insurance Commission (NAICOM), effective from Jan. 1.

The IFRS 17 Project Manager of AIICO Insurance, Mr Mayowa Korode, made this known during a training session organised for journalists covering the insurance sector in Lagos.

“AIICO Insurance is fully ready for the implementation and the company’s first and second quarters 2023 reports were done in IFRS 17 model.

“The most fundamental element of change that IFRS 17 brought to the financials, is the  closer alignment of the accounting to the underlying economics of insurance.

“IFRS 17 is a comprehensive standard to account for insurance contracts applicable to companies that prepare financial statements under IFRS.

“It replaces IFRS 4, which was not a comprehensive standard. The new standard provides a single global accounting standard for insurance contracts,” he said.

According to him, the IFRS 17 was developed to bring consistency to financial reporting around the globe for companies reporting under IFRS.

The manager said it facilitates better comparison between insurance companies and other sectors of the economy.

Korode also said that IFRS 4 has a variety of treatments, depending on the type of contract and company.

He noted, “IFRS 4 estimates for long-duration contracts which are not updated, discount rate based on estimates does not reflect economic risks, it lack discounting for measurement of some contracts and little information on economic value of embedded options and guarantees”

The project manager explained that the IFRS 17 provides consistent accounting for all insurance contracts by all companies, estimates update to reflect current market-based information, while discount rate reflects characteristics of the cash flows of the contract.

According to him, the measurement of insurance contract under IFRS 17, reflects time value where significant and measurement reflects information about full range of possible outcomes.

Korode stated that the balance sheet in IFRS 17 requires a current measurement model, where estimates are re-measured in each reporting period.

He said, “under IFRS 17, entities have an accounting policy choice to recognise the impact of changes in discount rates in profit or loss or in other comprehensive income (‘OCI’) to reduce some volatility in profit or loss.

“IFRS 17 disclosures will be more detailed than required under current reporting frameworks; disclosures will provide additional insight into key judgements and profit emergence.

British institute certifies AIICO Insurance

AIICO Insurance declares N7.55bn profit, 3k dividend

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Shareholders of AIICO Insurance Plc., on Friday commended the firm for recording N7.55 billion profit after tax in 2022 financial year, as against N4.92 billion achieved in 2021.

They gave the commendation at the company’s 53rd Annual General Meeting (AGM) in Lagos.

The National Coordinator, Independent Shareholders Association of Nigeria, (ISAN), Mr Moses Igbrude, also commended  the company’s financial performance, especially amid the enormous challenges in the country.

Igbrude lauded the firm for declaring three kobo dividend payout, while urging it to do more on insurance education.

According to him, this will make  more policyholders to get more profits and return on investment to the shareholders.

Another shareholder, Mr Adebayo Adeleke, Managing Director, Lancelot Ventures Ltd., urged the management of the firm to bring more prospective customers  on board through the deployment of robust technology.

He told the underwriter to leverage its funds to invest in opportunities created by deregulation policies of the Federal Government.

In his address, Chairman of AIICO, Mr Kundan Sainani, said the firm’s Gross Premium Written (GPW) stood at N88.28 billion as at Dec.31, 2022, compared to N71.63 billion recorded in 2021.

Sainani said the insurance company’s Gross Premium Income (GPI) for the year under review was N74.03 billion, as against N61.1 billion achieved in the previous year.

He stated  that the company’s net claims payment was N44.99 billion in 2022, contrary to N39.91 billion expended in the previous year.

According to him, the firm’s total assets in the year under review was N270.33 billion, total equity was N45.01 billion, while shareholders’ fund was N44.59 billion.

On dividends to shareholders, the chairman stated that the company’s approach to capital allocation had not changed.

Sainani added that the underwriting firm had to manage the tension between reinvesting in its businesses and returning cash to shareholders, while keeping regulatory and economic capital constraints in view.

“To manage these tensions and in recognition of the importance of returning cash to shareholders, the company has a dividend policy that stipulates a percentage of profits to be returned to shareholders, whenever possible.

“In the 2021 fiscal year, the company returned a dividend per share of two kobo to shareholders, considering our constraints.

“This year, the company is happy to announce that it is proposing a dividend of three kobo per share to shareholders, a 50 per cent rise from the payout in the last year.

“The company’s management has determined that subject to economic capital targets, this sum represents the optimal cash transfer to shareholders, based on the 2022 full year performance,” he said.

The chairman explained that the company recorded impressive revenues and growth in shareholders’ value in 2022, adding that the achievement was part of its effort to improve engagement with shareholders and the investment community.

He stated that the group’s insurance business remains its flagship business, generating the bulk of profits for the group.

 “In year 2022, the non-life and HMO businesses increased their contributions to profit, leading to an 81.2 per cent increase in profit before tax at group level to N5.1 billion from N2.8 billion in 2021,” he said.

According to him, the insurance company, in 2022, completed the sale of AIICO Pensions to FCMB Group, a process that began in 2021

Sainani stated that the company recognised an additional gain of about N2.9 billion from the sale of this subsidiary, leading to total profits after discontinued operations rising 53.6 per cent to N7.6 billion from N4.9 billion in 2021.

He said that the gain on sale of the subsidiary across the two years 2021 and 2022, in total,  was N5.2 billion.

AIICO Insurance is a composite insurer in Nigeria, founded in 1963 to provide life, general and health insurance and investment management services to create and protect wealth for individuals, families and corporate customers.

British institute certifies AIICO Insurance

AIICO Insurance records N45.5bn gross premium in first half of 2022

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AIICO Insurance Plc. declared in Lagos on Saturday that it recorded a Gross Written Premium (GWP) of N45.5 billion in the first half of 2022.

The company’s unaudited report showed that the GWP increased by 21.4 per cent compared with the N37.481billion recorded in the corresponding period of 2021.

The insurance firm said it earned Gross Premium income of N40.573 billion which indicated a 17.9 per cent increase from the N34.435 billion earned in the corresponding period of 2021.

“GWP grew by 21.4 per cent year-on-year to N45.5 billion in the half of 2022 compared to N37.5 billion recorded in the comparative period of 2021.

“This was due to a year-on-year increase of 39.4 per cent in General Insurance to N15.5 billion compared to N11.1 billion recorded in the first half of 2021.

“Life Insurance premiums increased by 14.2 per cent year-on-year to N29.6 billion compared to N25.9 billion recorded in the corresponding period of 2021.

“Underwriting income from our Health Maintenance Organisations increased by 31.4 per cent year-on-year to N599.9 million compared to N456.4 million recorded in the comparative period under review,’’ it stated.

According to the underwriter, its operating income in Asset Management declined by 9.5 per cent year-on-year to N697.6million compared to N770.5 million recorded in the corresponding period of 2021.

AIICO stated that its profit before income tax from continuing operations increased by 146.9 per cent year-on-year to N2.2 billion in first half of 2022 compared to N908.6 million recorded in the first half of 2021.

It added that its profit before income taxes across the group and its subsidiaries increased year-on-year contributing to the reported increases for the period.

According to the underwriting firm, this was due to improved top line and investment performance for the period compared to what it did in the first half of 2021.

“AIICO also completed the sale of its stake in AIICO Pensions, recording a profit from discontinued operations of N2.9 billion.

“As a result, profit for the interim period rose by 51.4 per cent to N4.9 billion in the first half of 2022 from N3.3 billion recorded in the first half of 2021,’’ it also stated.

Commenting on the result, Mr Babatunde Fajemirokun, Managing Director and Chief Executive Officer, AIICO Insurance said the half year result was a testament to the resilience of its business model and focus.

He said the company’s unaudited results represented the firm’s performances for the interim period ended June 30 2022.

Fajemirokun added that the insurer had created products that its customers needed to navigate uncertain periods, trusting that the company would be there when they need it.

AIICO Insurance Plc. has been in operation in Nigeria for some 50 years.

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AIICO Insurance notifies NGX of 33.9% acquisition by FCMB Pensions

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AIICO Insurance has notified the Nigerian Exchange (NGX) Ltd of the completion of the sale of AIICO Insurance’s 33.9 per cent shareholding in AIICO Pensions Managers Ltd to FCMB Pensions Ltd.
The Company Secretary of AIICO Insurance, Mr Donald Kanu, said this in a notice posted on the NGX website on Wednesday.
Kanu said the notice was in pursuant to Rule 17.6 of the Issuers Rules, Rulebook of the NGX 2015, following the obtention of all relevant regulatory approvals.
He said that based on the transaction structure approved by the regulators, only 33.9 per cent of AIICO Insurance’s shareholding in AIICO Pensions was sold to FCMB Pensions.
Kanu said this was against the 70 per cent stake as indicated in its earlier notification to the NGX.
He added that FCMB Pensions bought 26.1 per cent stake held by other shareholders in AIICO Pensions thereby making FCMB Pensions a majority shareholder with 60 per cent stake in AIICO Pensions.
“FCMB Pensions also bought 26.1 per cent stake held by other shareholders in AIICO Pensions thereby making FCMB Pensions a majority shareholder with 60 per cent stake in AIICO Pensions.
“In line with the approval from the National Pension Commission (PENCOM), the transaction is subject to a merger of AIICO Pensions and FCMB Pensions.
“This is in compliance with the PENCOM’s circular ref: PENCOM/INSP/CIR/SURV/15/03 of Sept. 21, 2015 which states that “no individual, group of individuals or company shall have direct or indirect ownership/shareholding of five per cent and above in more than one licensed Pension Fund Operator,” he said.
Kanu said following the sale, AIICO Pensions ceases to be a subsidiary of AIICO Insurance but an indirect subsidiary of FCMB Group Plc.

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Pension Directorate issues Certificate of Non-indebtedness to AIICO

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The Pension Transitional Arrangement Directorate (PTAD) has issued a Certificate of Non-Indebtedness to AIICO Insurance Plc to clear the underwriter of any claim of non-remittance of pension assets.

Mr Segun Olalandu, AIICO Head of Strategic Marketing and Communications, stated this in a statement in Lagos.

“The certificate was issued about two weeks ago at a meeting held between the parties to formally hand over redeemed property ceded by the insurer  in 2017 in lieu of Legacy Funds and Assets to PTAD.

“This process is subsequent upon confirmation of receipt of the full payment from AIICO and completing all reconciliation activities,” he said.

The statement quoted Dr Chioma Ejikeme, Executive Secretary, PTAD, represented by Mr Godwin Iheabunike , solicitor, PTAD, to had  acknowledged the payments made by AIICO insurance .

Ejikeme confirmed that PTAD had issued a Certificate of Non-indebtedness to AIICO insurance and would update relevant institutions of the development in due course.

“We thank AIICO Insurance Plc for her commitment toward the liquidation of this liability within the shortest period of time.

“My congratulations go to the MD/CEO and his team for this uncommon accomplishment.

“I call on other insurance underwriters holding on to Legacy funds and assets to do the needful as a matter of urgency to enable the directorate to meet its obligation to pensioners’’, she said.

In his remarks, Mr Babatunde  Fajemirokun, Managing Director,  AIICO, expressed his appreciation to PTAD leadership and team for working tirelessly with the AIICO team through the detailed reconciliation and for final closure.

The Senate Public Account Committee had on April 12, summoned NICON Insurance Plc, AIICO Insurance and other insurance companies over alleged failure to remit N17.4 billion fund to PTAD.

Executive Secretary, PTAD, Dr Ejikeme, had told the panel that PTAD took over assets and liabilities of defunct pension offices without a formal handing over.

Ejike said, on taking over, the directorate wrote all underwriters to make returns and remit whatever amount in their custody into a Central Bank of Nigeria (CBN) dedicated account.

She said some of the underwriters responded to the request while some did not.

According to her, the N17 .4 billion comprised of cash, securities and properties from nine underwriters as a result of the letter PTAD sent to them.

AIICO Insurance is a leading composite insurer in Nigeria with a record of serving its customers for over 50 years.

Founded in 1963, AIICO provides life and health insurance, general insurance and investment management services as a means to create and protect wealth for individuals, families and corporate customers.

British institute certifies AIICO Insurance

AIICO records N60.7bn Gross premium

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Moses Uwagbale

AIICO Insurance has announced that it recorded N60.7 billion as its Gross Written Premium in its audited results for 2020.

This is contained in a statement signed by the insurer’s Head of Marketing Strategy and Communication, Mr Segun Olalandu, and made available to newsmen in Lagos on Tuesday.

Olalandu said that the N60.7 billion represented 21.3 per cent growth, when compared to the 2019 financial year figure of N50.1 billion.

He attributed the growth to continuous investment in the agency’s force, increased focus on partnerships and better relationship with corporates.

The spokesman said that the firm recorded an underwriting loss of N36.3 billion in 2020 compared to N7.7 billion in 2019.

He hinged the loss on two main factors — reserving requirements for new policies underwritten in the life business in 2020 and changes in actuarial reserves in the life business for policies written in 2020 and prior years.

“There were significant movements in investment yields which affected the value of liabilities and assets in our life business.

“On the short and long ends of the yield curve, yields declined by about 7.7 per cent and 5.5 per cent respectively in 2020.

” The effects of these changes are reflected in the change in life and annuity funds, as well as fair value gains or losses on the income statement.

” In addition, changing client preferences mean that there has been a change in our retail product mix.

“Some of these products require higher reserving requirements which results in an increase in our liabilities, thereby reducing reported underwriting profits, ” he said.

According to him, the underwriting performance in the general business also declined due to increased claims in fire because of the civil unrest across the country and special oil lines.

Olalandu said that the investment income of the insurer grew by 13.1 percent year-on- year to N11.7 billion in 2020 financial year from N10.4 billion in 2019 financial year from increased assets under management.

He said profit before tax from continuing operations declined by 22.6 per cent year-on-year to N4.6 billion in 2020 financial year from N6.0 billion in 2019 financial year.

According to him, the drop was due to the lower-than-expected profits in the company’s Life business as a result of higher-than-expected reserving requirements/low yields.

“However, our General Insurance and Wealth Management businesses increased their contribution to profits,” he said.

Olalandu said that the profit after tax from continuing operations declined by 12.9 per cent year-on-year to N5.0 billion in 2020 from N5.7 billion in 2019 financial year.

He said profit for the year declined by 11.1 per cent year-on-year to N5.2 billion in 2020 financial year from N 5.9 billion in 2019 financial year.

The spokesman said the company’s total asset increased by 52.4 per cent to N 243.1 billion in 2020 financial year from N159.5 billion in 2019 financial year.

According to him, AIICO’s total liability also grew by 59.6 per cent to N 208.4 billion in 2020 financial year from N130.6 billion in 2019 financial year .

He said the firm’s total equity increased by 19.9 per cent to N34.7 billion in 2020 financial year from N28.9 billion in 2019 financial year.

Mr Babatunde Fajemirokun, Managing Director /Chief Executive Officer of the insurance company was quoted in the statement to have said that the pandemic caused a questionble global marketplace and led to a global economic upheaval.

Fajemirokun explained that the Nigeria economy slipped into its second recession in five years, with the business environment further impacted by incidents of civil unrest.

” Despite these unprecedented macroeconomic disruptions, AIICO grew its total assets by 52.5 per cent in the year under review.

” We delivered sound results having taken decisive early actions to protect our workforce, improve our financial strength, streamline operations and reinforce our distribution strategy .

” Over the past 5 years, we invested substantially in human capital and technology to significantly elevate our customer experience.

” This resulted in our gross written premiums growing 23.6 per cent year-on-year despite restrictions caused by the pandemic, ” he said.

According to the managing director, the company’s financial position remains strong, inspiring confidence in its ability to assume the risks it’s customers wishes to transfer.

Fajemirokun said the insurer’s investors showed their commitment, as its rights issue announced in September 2020 was oversubscribed by about 26 per cent .

He noted that the capital was deployed judiciously, generating risk-adjusted returns for its shareholders and ensuring that it continue to keep its promises.

AIICO Insurance is a leading composite insurer in Nigeria with a record of serving clients for over 50 years.

Founded in 1963, AIICO provides life and health insurance, general insurance, investment management and pension management services to create and protect wealth for individuals, families, and corporate customers.