AIICO Insurance Plc is targeting to achieve N62.23 billion gross premium income for the fourth quarter ending December 2020.
In its Q4 earning forecast obtained from the Nigerian Stock Exchange (NSE), the insurance firm also projected N11.24 billion as profit after tax and N11.33 billion as profit before tax for the period.
AIICO Insurance reported gross written premiums of N31.9 billion, representing 26 per cent rise from the same period in 2019 (Q2’19: N25.4bn).
According to the insurance firm, the growth was driven by sustained positive performance across the major lines of business of the group.
AIICO in a statement made available to newsmen said the group’s shareholders’ funds increased by 9.39 per cent from N27.9 billion in 2019 to N30.5 billion, driven by the group’s earnings for the period and its strong matching of long term asset and liabilities, despite volatile yields along the yield curve.
However, the group’s profit before tax (PBT) reduced by 28 per cent to N2.17 billion, compared to N3.01 billion in Q2’19.
The reduction was as a result of changes in product mix in the retail life business due to changes in clients’ preferences.
These product preferences were, however, impacted by the lower interest yield environment – leading to a 71 per cent increase in the proportion of premiums that had to be transferred to life funds (shown as change in life fund).
Mr. Babatunde Fajemirokun, the MD/CEO, speaking on the financial results, stated: “Besides our operational resilience and strategic marketing within the period, our brand equity, advanced level of automation and business continuity plans enabled us to quickly adjust our business model to meet the emerging demands of the low touch economy, triggered by the global pandemic.
“The strong committed relationship we have built with our customers continue to endear them to us for repeat business, new businesses and referrals”.
AIICO Insurance recently disclosed that it has entered into discussions with FCMB Pensions Limited for the divestment of its interest in its Pension subsidiary, AIICO Pension Managers Limited. The proposed sale will see a full uptake of AIICO’s 70 per cent stake in the company.
A statement signed by Head, Strategic Marketing & Communications Department, AIICO, Segun Olalandu, said the proposed transaction was subject to the approvals of the National Pension Commission (PenCom) and the Federal Competition and Consumer Protection Commission (FCCPC).
This divestment is for two reasons, according to the Manging Director/CEO, AIICO, Babatunde Fajemirokun.
“The first is to unlock the value that is greater than holding the asset as a subsidiary now and in the future. The second reason is to deploy the ensuing capital in other assets where AIICO has a stronger competitive advantage, thereby maximising long-term value for its stakeholders. It is not driven by the company’s recapitalisation plans which is on its own path and nearly complete,” he said.