AIICO Insurance Plc ended the first quarter operations with N1.4 billion profit indicating a 72 percent drop from N4.9 billion following a lack of sales of investment that swelled the bottom line in that period last year.
Also, net fair value losses jumped by over N11 billion from net gains of N1.5 billion in the same quarter last year to N9.7 billion in the first quarter of the current financial year.
That swallowed up investment income of roughly N6 billion and produced a net investment loss of almost N4 billion at the end of the quarter.
The unaudited financial report of the composite risk underwriter for the period ended March 2023 shows a robust increase in insurance service results as well as a strong growth in investment income but the fair value loss stood in the way to profit.
Insurance service results advanced from a restated figure of about N467 million in the same period last year to N1.95 billion at the end of the first quarter. The strong growth reflects stronger growth in insurance revenue than insurance service expense.
At N14.7 billion, insurance revenue grew by 24.6 percent in the quarter against a significantly moderated increase of 9 percent in insurance service expense to N10.6 billion.
Also, investment income rose by 75 percent in the quarter to almost N6 billion, showing upswings in both the underwriting and investment arms of the business.
Loss of asset value lowered the value of financial assets from over N225.5 billion at the end of last year to N219.5 billion at the end of the first quarter.
Net investment income dropped from N4.6 billion in the first quarter of 2022 to a net loss of N3.9 billion at the end of the first quarter in March 2023.
A saving grace for the company in the quarter came from net finance income of N6.5 billion from insurance contracts – a major upswing from a net cost of N736 million in the same quarter last year. This was boosted further by net finance income of N179 million from reinsurance contracts, up from N145.6 million over the same period.
Total net finance income of about N6.7 billion provided the strength to absorb the net investment loss of N3.9 billion and still left a net insurance and investment result of N4.7 billion for the company at the end of the first quarter.
The figure is slightly ahead of the N4.5 billion net insurance and investment income the company recorded in the same quarter last year.
With an increase in operating expenses, pre-tax profit went down by over 12 percent to less than N1.4 billion over the period. With a small net tax credit, after-tax profit from continuing operations improved marginally but remained at roughly N1.4 billion.
The difference came from the absence of profit from discontinued operations this year so far. Last year, profit from discontinued operations of about N3.4 billion swelled the first quarter profit figure from N1.55 billion from continuing operations to N4.9 billion.
Earnings per share dropped from 13 kobo in the same quarter last year to 4 kobo per share.
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