AIICO’s Age-Old Expertise Fails To Hold Underwriting Cost Down
AIICO is a popular name in the insurance industry where it has played for 56 years. It started operations on these shores in 1963 as an offshoot of the American life firm, AIICO. Its growth was inspired by its focus and strategies, which combined to pull huge patrons, and made it a market-leader in its lines of business that ranges from Life assurance and annuity, general insurance and special risks, Pension management, Health insurance and, Asset management
percent increase in net underwriting income during the period, consuming more than all the increases in net earnings from the underwriting business during the period.
to the full year figure last year.
enough to overwrite the underwriting loss. The second development was an upsurge in net fair value gains that multiplied more than 12 times year-on-year. The third leg of the company’s profit building tripod is a cost saving from a decline in other operating expenses and a moderated growth in personal costs.
at 7.8 percent to a little over N12 billion but other underwriting costs blew up total underwriting expenses to over N27 billion at the end of the period.
company has been swinging between underwriting losses and profits in recent years and the biggest loss in the core business looks quite likely for the company this year.
Rising from a big underwriting loss to build profit is a task on the hands of AIICO Insurance management this year. Three favourable developments in the year are providing the linking
bridge from underwriting loss to profit so far.
compensating performance for the company in the season of volatile earnings from underwriting business.
the end of June 2019, a build-up of over 23 percent from the closing figure last year. The portfolio consists largely of fixed income government and corporate bonds that yield according
to plan irrespective of the state of the financial markets.
times to N6.3 billion year-on-year. This is a sharp turnaround from a net fair value loss of N2.52 billion at the end of last year.
expenses declined. Tax expenses also dropped by more than a third against an increase in pre- tax profit.
to the N3.15 billion after tax profit the company earned in all of 2018.
company this year. There remains a long way to go to return to the peak after tax profit record of N10.24 billion in 2016.
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