Axa Mansard Insurance assets jump 20% as gross premium written reaches N17.95bn

Axa Mansard Insurance Plc, a Lagos-based composite insurance company that also offers asset management services to individuals and institutions across Nigeria, has grown its assets by 20 per cent to N65.81 billion for the half year ended June 30 2017.

Analysis of the consolidated financial statements for the period also showed that the insurer’s gross premium written for the period surged 36 per cent to N17.95 billion from N13.22 billion recorded in the corresponding period in 2016.

Net premium income for the period rose 18 per cent to N6.46 billion as investment and other income increased slightly to N4.134 billion.

Axa Mansard’s combined ratio, a measure of profitability, a measure of profitability, improved to 106 per cent, from 112 per cent the previous year, as the company continues to utilise assets more profitably.

“One of our key goals going into this year was to improve the efficiency of our reinsurance strategy as a way of managing the anticipated growth in our portfolios,” said Rashidat Adebisi, the chief financial officer of Axad Mansard. “The improvement in our accounting loss ratio from 80% to 78% in 2017 validates our efforts in this regard.”

Axa Mansard is operating in a tough environment triggered by as a sharp drop in oil prices since mid-2014 and shortage of dollars, which plunged Nigeria country to its first recession in a quarter of a century. Economic activities slowed as rising living cost damped consumer willingness for taking insurance cover.

 

	Jun-17	Jun-16	Change
	N’000	N’000
Gross Written Premium	17,946,621	13,218,844	36%
Net Premium Income	6,456,217	5,479,126	18%
Investment & Other Income	4,134,517	4,125,660	0%
Net Claims	4,552,946	3,649,535	25%
Underwriting Expenses	5,884,102	4,599,269	28%
Operating Expenses	2,960,388	2,824,870	5%
Total Assets	65,813,798	54,958,172	20%
Reinsurance Assets	14,272,231	9,184,177	55%
Insurance Liabilities	25,711,695	14,433,322	78%
Investment Contracts	5,995,269	5,650,541	6%
Shareholders’ Funds	18,380,951	17,409,998	6%
NB: Changes in reinsurance assets, insurance liabilities, investment contracts, and shareholders’ funds were measured from December 31 2016

Source: Company Financials

The insurer’s underwriting expense ratio, which measures underwriting expenses as a percentage of premiums earned for the period, crawled by 1 percentage point to 11 per cent compared to the previous period.

Operating expenses rose 5 per cent from 2016 levels to N2.96 billion. Profit before tax declined 5 per cent to N2.32 billion versus the corresponding period of 2016; profit after tax dropped 6 per cent to N2.12 billion compared to period-ended 2016.

Axa Mansard grew its revenue despite macroeconomic headwinds as shareholders returns remained positive. Return on average equity was 16 per cent during the period while return on average asset stood at 7 per cent, a marginal decline from 8 per cent as at June 2016.

“Our focus on identifying new growth areas in our markets continue to pay off as we grew revenues by 36% despite the challenging operating environment,” said Kunle Ahmed, the chief executive officer of Axa Mansard in a release on company results last week. “We also strengthened the bottom-line through cost optimization and efficient resource utilization as demonstrated by the 4% improvement in our operating expenses (opex) ratio.”

 

The company’s focus on efficiency saw combined ratio drop by 6 percentage points to 106 per cent as against 112 per cent of the corresponding period in 2016. The combined ratio is a measure of profitability that an insurance company uses to gauge how well it is performing in its daily operations.

Axa Mansard equity price stood at N2.17 when trading closed at The Nigerian Stock Exchange on Monday, valuing the company at N22.79 billion.

 

INNOCENT UNAH