AXA Mansard delivers strong performance in Q1 2016

AXA Mansard Plc delivered a strong performance to start 2016 financial year, which validates the asset manager’s well diversified and balanced portfolio despite a challenging business environment.

Analysts say the company’s impressive results demonstrated the validity of its lean and efficient business model while significantly growing book of business in a tough market environment.

For the first three months through March 2016, AXA Mansard’s net income increased by 44.04 percent to N700.10 million as against N486.02 million as at March 2015.

Gross premium written was up by 25.78 percent to N8.83 billion as the company testified the strengthening of its client franchise, both by expanding geographically and line of business, as well as developing larger shares and new business from existing clients.

In addition, gross premium income jumped by 20.49 percent to N4.88 billion in 2016 from N4.05 billion the previous. Underwriting capacity was efficient as net premium income jumped by 15.062 percent to N2.75 billion in 2016 compared with N2.39 billion in 2015.

Equally important, AXA Mansard uncompromising focus on technical excellence yielded a good underwriting profit and a further substantial reduction of its cost ratio.

The business environment was tough and challenging in 2015. A significant drop in the price of oil forced the Central Bank to impose capital controls in order to protect the reserves and curb inflation.

The policy has come under intense criticism from most manufacturers and businesses because they cannot import raw materials to meet production since dollars have become scarce.

Economic growth has slowed to 2.8 percent, the slowest in a decade.

Experts opined that due to the restrictions, volume of activities have reduced at the port and insurance companies lost revenue they would have realized from insurance on Goods In Transit  (GIT)

GIT Insurance provides insurance from the point of loading to destination.

“If they are moving less goods, they have less to insure,” said Afolabi Lawal, Finance Controller of Aiico Insurance Plc, by phone.

While most companies are grappling with the tough and unpredictable environment, AXA Mansard has remained profitable with improved efficiency as combined ratio (CR) stood at 81.70 percent in 2016, a figure that is higher than the 77.06 percent recorded the previous year.

Business Day’s calculation shows the increase in CR is due to rising claims expenses. Total net claims expenses increased by 29.62 percent to N1.75 billion in March 2016 from N1.35 billion as at March 2015.

AXA Mansard’s claims ratio increased to 63.63 percent in 2016 compared with 56.94 percent in 2015.

This means for every N100 the company generated in premium income, it spent N63 on claims to policy holders.

BALA AUGIE