Economy
AXA Mansard Insurance Grows Earnings by 12% After IFRS 17 Implementation
AXA Mansard Insurance plc, a member of the AXA Group, has recorded 12 per cent revenue growth for the second quarter ended June 30, 2023, following the implementation of the IFRS17 and IFRS9 accounting standards.
The accounting standard became effective on January 1, 2023. consequently, gross earned premiums (Insurance revenues) become the principal revenue indicator given the change in accounting standard
The commercial activity of insurance operations will now be reported using insurance (earned) revenues as against gross written premiums (GWP). The reinsurance expenses will now also be reflected as “net expenses from reinsurance contracts held” with the main difference from what was previously reported being the netting of commissions received and claims recoveries from assumed reinsurance businesses. For asset management, commercial activity continues to be measured on revenues.
Commenting on the results, the Chief Financial Officer, Mrs Ngozi Ola-Israel, said, “In the first half of the year, we grew Gross Written premiums by 22%, delivering insurance revenue growth of 12% from N34.7 billion to N39.0 billion despite our challenging and evolving economic environment, particularly in the second quarter of the year.
“This performance further reinforces our resilience and capacity to produce sustainable results even in a challenging business environment. Our operating performance also improved significantly, with PBT growth of 528 per cent to 14.8 billion from 2.4 billion last year, owing to significant improvement in the P&C and L&S segments, net FX gains from devaluation effect as well as the significant recovery from the health segment.”
Commenting on AXA Mansard’s financials at the end of the first half of 2023, the Chief Executive Officer of AXA Mansard Insurance, Kunle Ahmed, said, “We are proud to retain the trust of customers, brokers, and partners despite the challenging economic environment.
According to him, “The outstanding performance demonstrates our dedication to ensuring sustainable growth in the face of this environment as we achieved improved revenue and operating performance in the first half of the year.
“With our focus on resilience, we will remain an exceptional insurer with great financial strength, excellent underwriting capabilities, and efficient claims management processes.
“However, looking forward to the second half of the year, we are optimistic about the opportunities for our business through improved processes with our technical and digital capabilities while prioritizing our customer-centricity, growth, and profitability.”
The underwriter said that the insurance revenues improved by 12 per cent YoY (39.0 billion vs 34.7 billion). Growth is driven by Health (+27%) and L&S (+23%), partly offset by a P&C decline of 5 per cent due to a change in the timing of booking of key business in the current period vs this time last year.
The life and health business recorded growth resulting from improved customer retention, increased share of existing business, and the acquisition of new businesses.
Gross revenues: grew 22 per cent YoY (N54.8 billion vs N45.0 billion).
Improved performance is due to our ability to acquire new businesses as well as our improving retention rates. Growth is spurred by Health (+26%), L&S (+20%), and P&C (+19%). P&C volumes performance is attributable to improved performance in the commercial lines growing by 19 per cent YoY.
Life volume acceleration is driven by the impacts of the new life savings product. Health volumes improve owing to increased premiums from re-pricing and renewal of key businesses.
P&C improves 19 per cent YoY due to strong performance in the Oil & Energy portfolio, which grows by 21% and is partially offset by declines in Aviation and Marine due to changes in the structure of key businesses.
Growth is also driven by improved performance in personal lines as well as increased premiums on strong renewals and new businesses. The focus remains on maintaining efficiency to ensure the growth and profitability of all our portfolios.
L&S segment grows 20 per cent YoY owing to improved performance in individual life business (+59%) which is partly offset by the 1% dip in group life due to delayed renewals of key businesses. Growth in the individual life portfolio is largely driven by the impact of the increase in customers onboarded and increased volumes from protection with the new life savings products. In addition, improved agent productivity has also contributed to the growth in revenues.
Total revenues improved 14% YoY, with higher management fees benefiting from improved 3rd party assets under management. Own AuMs improved by 25%, with 3rd party client count growing by 18%, leading to a 30% growth in 3rd party AuMs and a 28% growth in total AuMs.
Overall, PBT significantly improved by 528% YoY owing to 346% growth in P&C profits and significant growth in the health business, which is partly offset by a 37% dip in the life business. 346% growth in P&C is attributable to improved revenues and underwriting performance, as well as fair value gains. The dip in the life business is driven by increased claims experienced during the period compared to last year and partly offset by reduced underwriting expenses and higher investment margins. The health business continues with its recovery to deliver a N3.5bn profit owing to higher volumes, improved claims management, and operating efficiency.
Shareholder’s fund stood at N41.4 billion, growing by 40 per cent from N29.7bn in FY22 driven by profits in H1 and by fair value gains.
Return on Shareholder’s Equity (ROE) improved by 33.8 percentage points from 7.7 per cent prior year to 41.5% owing to the improved performance in the business. The operating performance of the group increased by 528% (N14.8bn from N2.4bn LY) while average shareholder’s equity also grew 16% (N35.6 from N30.7bn LY) owing to changes in fair value reserves. As a group, we remain committed to providing value to our shareholders.
Return on Assets (ROA) improved by 9.9 percentage points up to 12.0% from 2.1% when compared with the prior year. The growth indicates efficient asset utilization towards improved PBT growth of 528% (N14.8bn from N2.4bn LY). The average asset has also increased by 10% (N123.0bn from N111.9bn LY) owing to an improved asset base (near cash and insurance contracts assets) as we continue to consolidate on financial strength during the year.
By Adedapo Adesanya
Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.
Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.
This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.
Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.
Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.
At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.
InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
By Dipo Olowookere
The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.
This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.
UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.
On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.
Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.
Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.
A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.
This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.
For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.
By Adedapo Adesanya
The Naira marginally depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, December 4 amid renewed forex pressure associated with December.
At the official market yesterday, the Nigerian currency lost 0.01 per cent or 18 Kobo against the Dollar to close at N1,447.83/$1 compared with the previous day’s N1,447.65/$1.
It was not a different scenario with the local currency in the same market segment against the Pound Sterling as it further shed N15.43 to sell for N1,930.97/£1 versus Wednesday’s closing price of N1,925.08/£1 and declined against the Euro by 20 Kobo to finish at N1,688.74/€1 compared with the preceding session’s N1,688.54/€1.
Similarly, the Nigerian Naira lost N5 against the greenback in the black market to quote at N1,465/$1 compared with the previous day’s value of N1,460/$1 but closed flat against the Dollar at the GTBank FX counter at N1,453/$1.
Fluctuations in trading range is expected to continue during the festive season as traders expect the Nigerian currency to be stable, supported by intervention s by to the Central Bank of Nigeria (CBN)in the face of steady dollar demand.
Support is also expected in coming weeks as seasonal activities, particularly the stylised “Detty December” festivities, will see inflows that will give the Naira a boost after it depreciated mildly last month, according to a new report.
“As the festive Detty December season intensifies, inbound travel, tourism spending, and diaspora inflows are expected to provide moderate support for FX liquidity,” analysts at the research unit of FMDA said in its latest monthly report for November.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450 next week, buoyed by improved FX interventions by the apex bank.
Meanwhile, the crypto market was down as the US Federal Reserve’s preferred inflation gauge, core PCE, likely rose in September—moving in the wrong direction. However, volatility indices show no signs of major turbulence.
If the actual figure matches estimates, it would mark 55 straight months of inflation above the US central bank’s 2 per cent target. The sticky inflation would strengthen the hawkish policymakers, who are in favour of slower rate cuts.
Ripple (XRP) depreciated by 4.5 per cent to $2.08, Solana (SOL) went down by 3.8 per cent to $138.11, Litecoin (LTC) shrank by 3.1 per cent to $83.23, Dogecoin (DOGE) slid by 2.5 per cent to $0.1463, Cardano (ADA) declined by 2.1 per cent to $0.4368, Bitcoin (BTC) fell by 0.9 per cent to $91,975.45, Binance Coin (BNB) crumbled by 0.9 per cent to $899.41, and Ethereum (ETH) dropped by 0.7 per cent to $3,156.44, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.
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