AIICO posts N1.28bn loss in 2013, as net premium income spikes

Aiico Insurance plc, a company that offers life and non-life insurance, recorded a loss of N1.28 billion in financial year 2013, as net premium income spiked. For the year ended December 2013, the insurer’s gross premium written surged by 10.94 percent to N23.60 billion from N21.27 billion in the same period of the prior year (FY12).

As a result of effective and efficient management of underwriting capacity, the company was able to grow net gross premium income by 13.28 percent to N18.22 billion in FY13, compared with N16.08 billion in FY12.

Despite the impressive result at the top-line level, rising operating cost crimped bottom-line growth as the insurer posted a loss before tax of N1.28 billion in FY 13, from a profit position of N2.08 billion in 2012.

It also posted a loss in profit after tax of N739.22 million in FY13, this compares with a profit of N1.32 billion in FY12.

The fulcrum of the loss emanated from a 33.33 percent surge in total underwriting expenses to N17.01 billion in 2013, as against N12.71 billion in 2012, while operating expense based on BusinessDay analysis increased by 20.22 percent to N7.17 billion.

It should be noted that the improvement in gross premium written came in spite of the ‘No premium, No cover’ policy by the National Insurance Commission of Nigeria (NAICOM).

The new code of ethics made it mandatory that no insurance policy would be renewed or issued last year, unless full premium was paid for the insurance cover.

In 2013, Aiico Insurance won the marketing magazine and marketing world award as the Insurance Brand of the year due to its underwriting excellence in Nigeria.

The insurance sector contribution to the Nigeria gross domestic product in the last rebasing exercise was 0.56 percent of the total estimated figure of N 80.22 trillion ($510bn).

This highlights the need for the Nigeria insurers to introduce products that will spur growth and also penetrate the markets as this will help increase contribution to the Nigeria economy.

Aiico’s total assets were up 20.11 percent to N42.1 billion in FY13, compared with N35.0 billion as of the FY12. Total equity in the review period decreased by 9.14 percent to N10.33 billion in FY13, from N11.37 billion as of FY12.

Aiico commenced operations in 1963, and became a public liability company in 1989. In 1990, the company got listed on the Nigerian Stock Exchange. The company’s share price closed at N0.82 – June 30, 2014, on the floor of the Exchange, while market capitalisation was N7.30 billion.

BALA AUGIE