AXA Mansard innovative products pays off as premium income soars

AXA Mansard Insurance Plc’s innovative products and aggressive risk appetite in a tough operating environment has paid off as the Nigerian insurer recorded a double digit growth in premium income to end 2015 financial year.

For the year ended December 2015, AXA Mansard’s gross premium income increased by 12.75 percent to N16.89 billion from N14.98 billion the previous year.

The company’s underwriting capacity was efficient as net premium income moved by 9.39 percent to N9.09 billion in 2015 compared with N9.05 billion in 2014.

AXA Mansard’s stellar performance in the period under review has validated the company’s innovative products across a wide spectrum and its prolific risk management strategy in a low premium environment.

Analysts also attribute the impressive results to the company’s capital strength and conservative underwriting and reserving policies.

“The Group recognizes that its continual sustainability initiative is largely contingent upon brand protection and enhancement of stakeholder value. Our ethos therefore mandates that the Group is averse to risks that essentially erode corporate value,” according to the company’s 2015 audited financial statement posted on the website of the Nigeria Stock Exchange.

“The Group’s risk appetite is primarily characterized by a clear risk strategy, monitoring and reporting procedure that provides the foundation to identify potential deviations from our risk tolerances…..,” said the company.

AXA Mansard has financial strength evidenced by a combined ratio (CR) lower than the 100 percent threshold.

The company’s CR increased to 79.80 percent in December 2015 compared with 69.96 percent at December 2014, based on data compiled by Businessday.

The Nigerian Insurer is aggressive about the settlement of claims to policy holders as total claims jumped by 18.75 percent to N7.25 billion in December 2015 from N4.73 billion as at December 2014.

Claims ratio jumped to 73.23 percent in the period under review as against 52.26 percent in December 2015. This means the company paid N73 for every N100 it generated in premium income.

Despite the challenges holding back the growth of insurance in Africa’s largest economy, AXA Mansard recorded a 12.40 percent rise in net underwriting income to N10.88 billion while net income was up by 3.10 percent to N1.66 billion.

However, underwriting profit reduced by 11.83 percent to N2.98 billion in December 2015 from N3.85 billion on the back of rising total underwriting expenses.

A.M Best, a global insurance rating agency, in 2015, upgrade its on AXA Mansard from “bb+” (Fair) to “bbb-” (Good) for the Issuer Credit Rating (ICR) and “B” (Fair) to “B+” (Good) for Financial Strength Rating (FSR). The rating agency also assigned a positive outlook to the rating.

Further analysis of the Nigerian insurer shows operating expenses increased by 23.73 percent to N5.94 billion in 2015 from N4.53 billion in 2014. Under writing expenses were up by 7.60 percent to N1.84 billion. Total assets grew by 14.13 percent to N51.20 billion in 2015 from 44.86 billion in 2014.

AXA Mansard’s share price closed at N2.40 on the floor of the exchange while market capitalization was N22.47 billion.

BALA AUGIE