In H1:2021, AIICO maintained a stout topline performance as gross premium written expanded 17.41%YoY to NGN37.48bn. The performance was largely driven by expansion in both the life and non-life business, with the life segment making most significant contribution (66.91% of total premiums written). On a broader scale, all segments of the business recorded growth except the annuity business which declined by 78.13%YoY to NGN833.59mn. Meanwhile, net loss ratio deteriorated to 60.80% (vs. 49.72% in H1:2020) due to higher claims payment which inched up by 46.30% YoY to NGN26.37bn. Underwriting expenses also grew by 37.74% YoY to NGN4.73bn
worsening combined ratio to 74.54% (vs.61.53% in H1:2020). However, the firm’s underwriting position was supported by the uptrend in the yield environment which implied lower valuations for liabilities in the Life and Annuity Funds. Thus, underwriting loss (of NGN10.86bn recorded in H1:2020) was reversed to an underwriting profit of NGN31.96bn in H1:2021. For 2021FY, based on yield performance in H1:2021 and the outlook for yields for the rest of the year, we expect a moderation in full year provisioning for Life and Annuity funds. This should translate to an underwriting profit of NGN12.59bn.
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