Insurer reports N19.7b gross premium in Q1
AIICO Insurance Plc has announced that its gross written premium (GWP) grew by 12.2 per cent year-on-year (Y-o-Y) to ₦19.7 billion in the first quarter of 2021 (Q1 2021) up from ₦17.6 billion posted in the same period last year.
The firm’s Head, Strategic Marketing and Communications Department, Segun Olalandu, said that the performance was due to a Y-o-Y increase of 34 per cent in the General Insurance business (35.7 per cent of gross written premiums) to ₦7 billion.
He noted that the underwriting profit of ₦N27.7 billion in Q1 was attached and that changes in sovereign bond yields impacted the value of our firm’s liabilities and assets. These movements, he said are reflected in the change in life and annuity funds, as well as fair value/, realised gains or losses on the income statement.
In the life business, he said the firm is typically concerned about whether there is a surplus or deficit of assets over liabilities because of the movements. However, because of limitations in financial reporting, changes in liabilities affect underwriting profits while changes in assets are reported below underwriting profits, he added.
“The effect is the significant variation in underwriting profits especially in volatile investment yield environments, such as we have in Nigeria. During Q1 2021, annualized yields rose by 430 basis points to 11.7 per cent at the long end of the yield curve, leading to a reduction in the fair values of assets and liabilities; the reduction in liabilities led to positive underwriting profit while the reduction in assets is reflected in the fair value losses for the period,” he posited.
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