AIICO Insurance Gross Premium Hits N32.1 Billion In 2017

L-R: AIICO Insurance Plc Executive Director Technical, Kadri Adewale; Executive Director Operations, Babatunde Fajemirokun and General Manager Retail Life, Sola Ajayi, shortly after  a press briefing by the company in Lagos recently.

AIICO Insurance Plc gross premium for the year, 2017 financial year has hit N32.,1 billion more than N27.06 billion recorded in its previous financial year, ended December 31, 2016.

The 2017 gross premium represents an increase of N5.03 billion or 19 percent from the previous year’s record.

AIICO Insurance Managing Director, Edwin Igbiti, disclosed these in a briefing with Journalists in Lagos, Nigeria.

He said: “We experienced significant growth as a company in 2017. We had to significantly increase our capacity and improve our processes to meet up with customer demands. Over the next few years, we have plans to grow our businesses; this means we must invest in technology and people to ensure our processes are more efficient to increase customer service levels.”

Igbiti further spoke on the company’s performance in life business within the period under review saying, “Our life business grew by 15 percent from N18.8 billion to N21.6 billion in 2017. This growth was driven by the increased popularity of our traditional life products: the ordinary life business grew by 29 percent in 2017 to N16.4 billion from N12.8 billion in 2016.”

He said that the non life business premium grew from N7.6 billion in 2016 to N8.7 billion in 2017, showing 15 percent growth.

The Managing Director of AIICO Insurance explained that the company has set plans for better growth in this regard, adding that the management has worked to improve on relationships with agents, brokers and various intermediaries this year to further improve on the performance.

He said gross premium income of the company reduced by 29 percent or N8.7 billion in 2017 to N21.3 billion from N30 billion in 2016.

He said: “For insurance companies, premiums are recognised as income when they are earned. The difference between gross premiums written and gross premium income (gross premiums earned) is the change in policy holders’ liabilities or reserves (reflected as change in unearned premiums balance for accounting purposes with the total policy holders’ liability reflected on the company’s balance sheet through the insurance contract and investment contract liabilities line items”.

He explained that the reduction in gross premium income in 2017 is largely due to the increase in the size of policy holders’ liabilities in the company’s life business.

“Life contract liabilities grew by N9.95 billion in 2017 compared to a decline of N3.7 billion in 2016. This was caused by growth in the business that led to reserves of N5.0 billion to be set up for new business acquired in the year and a decline in the yields from long-term government bonds that led to a decrease in interest rates used to value these liabilities resulting in an increase in policy holders’ liabilities of approximately N4.0 billion .

On the claims paid by the company during the period, Igbiti, said claims increased by 55 percent to N23.3 billion from N14.9 billion in 2016.

He said this was due largely to the increase in benefits payments in the life business, which according to him, grew from N6.1 billion or 53 percent in 2016 to N17.6 billion in 2017.

“Our life business is dominated by contracts with our clients that stipulate payouts at pre-determined times. It is therefore logical that as the business grows, payouts grow accordingly. Critical activities are cash and investment management, two activities that we keep a very close eye on”, he said.

He also said claims in the non-life and health management increased by N1.1 billion each, explaining that claims in health management increased due to the recognition of capitated premiums which are paid out directly to hospitals and are thus recognised as claims.