AXA Mansard Insurance plc, a member of the AXA Group, said on Wednesday that it recorded 13 percent revenue growth for the first quarter ended March 31, 2023. According to its financial statement adjusted for the implementation of IFRS17 and IFRS9, the insurance group said that the 13 percent growth in revenue amounted to N19.4 billion at the end of the first quarter from N17.3 billion at the end of the first quarter of 2022.
Other key variables from the statement showed that Life and Savings went up 23 percent from N3.9 billion in the first quarter of 2022 to close at N4.7 billion; health, on the other hand, also went up 23 percent from N6.1 billion in the first quarter of 2022 to close at N7.5 billion; and Property and Casualty fell by 2 percent from N7.5 billion to close at N7.3 billion.
Gross written premiums followed the same trajectory as they went up 20 percent to close at N34.4 billion.
The insurance group said that “Earned revenues improved by 13 percent YoY (19.4bn vs 17.3bn). Growth is driven by Health (+23%) and L&S (+23%) partly offset by P&C decline of 2 percent which is due to change in timing of booking of key business in the current period vs this time last year. The life and health business recorded 23 percent YoY growth resulting from improved customer retention rates, increased share on existing business and drive to acquire new businesses.
“Gross revenues grew 20 percent YoY (34.4bn vs 28.6bn), revenue performance is due to our ability to acquire new businesses as well as our capacity to renew existing businesses. Growth is spurred by Health (+22%), L&S (+20%) and P&C (+19%). P&C volumes performance is attributable to improved performance in the commercial lines growing by 17 percent YoY. Life volumes acceleration is spurred by increased onboarding on protection with savings products. Health volumes improves owing to the impact of increased premium from re-pricing in the commercial lines business.
“P&C improves 19 percent YoY due to significant improvements in the Oil & Energy portfolio, which grows by 25 percent and is partially offset by declines in Aviation and Marine due to changes in the structure of key businesses. Growth was also driven by increased premium on renewal, pricing changes, and new businesses. The group remains committed to ensuring improved performance on personal lines, for which we have specific action plans.”
It explained that its growth in the individual life portfolio was largely driven by the impact of the increase in customers onboarded and increased volumes from protection with savings products.
“Focus remains on launching more products with excellent value propositions to our customers,” it stated.
Accordingly, it reported that the Profit Before Tax improved significantly by 248 percent, a situation that is attributable to improved revenues and underwriting performance.
However, growth in the life business was driven by improved net premium income, reduced underwriting expenses, and higher investment margins, it stated.
“Shareholders’ fund stood at N29.5 billion, largely flat compared to N29.8 billion for FY22, largely driven by fair value losses.
“Return on Shareholder’s Equity (ROE) improved by 4.7 percentage points from 1.8 percent prior year to 6.4 percent owing to strong improved performance in the business.”
The insurance group promised to continue to drive its digital channel sales, especially as combined sales amounted to N559 million.
Furthermore, the group acknowledged that, given the change in accounting standards, gross earned premiums (insurance revenues) will become the principal revenue indicator.
“Commercial activity of insurance operations will now be reported using insurance (earned) revenues as against gross written premiums (“GWP”). The reinsurance expenses will now also be reflected as “net expenses from reinsurance contracts held” with the main difference from what was previously reported being the netting of commissions received and claims recoveries from assumed reinsurance businesses. For asset management, commercial activity continues to be measured on revenues,” it stated.
Commenting on the results, Ngozi Ola-Israel, the Chief Financial Officer, said, “We delivered double digit revenue growth of 13 percent from ₦17.3 billion to ₦19.4 billion and net premium income growth of 21 percent from ₦11.6 billion to ₦14.0 billion largely driven by the life and health business insurance revenues, which increased by 23 percent on a year-on-year basis.
“This achievement affirms our ambitions to achieve sustainable revenue growth and demonstrates our ability to execute our strategy in a challenging and evolving business environment. Our operating performance improved significantly, with PBT growth of 248 percent to N1.9 billion from N0.5 billion last year, which was driven by improved performance within the P&C and L&S segments as well as a significant recovery from the health segment.”
Also commenting on the financials, Kunle Ahmed, the Chief Executive Officer, said, “We started the 2023 financial year on a strong footing. We achieved improved revenue and profit before tax growth well ahead of our projections. With our focus on sustainable growth and resilience, we continue to take steps to explore new ways to strengthen our balance sheet while ensuring efficiency in our underwriting and claims processes. Looking forward to the rest of the year, we are optimistic about the opportunities that exist for our business as we leverage our technological and digital capabilities as well as the dedication of our employees and support of other stakeholders to continually deliver value to our customers.”