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
Three bellwether stocks lifted the NASD Over-the-Counter (OTC) Securities Exchange by 0.62 per cent on Friday, December 12 with the NASD Unlisted Security Index (NSI) jumping by 22.20 points to 3,600.43 points from 3,578.23 points.
In the same vein, the market capitalisation of the trading platform increased by N13.28 billion to close at N2.154 trillion from the previous day’s N2.140 trillion.
During the session, Central Securities Clearing System (CSCS) Plc went up by N2.53 to close at N39.71 per share compared with the previous day’s N37.18 per share, Geo-Fluids Plc added 35 Kobo to its price to finish at N5.00 per unit versus Thursday’s closing price of N4.65 per unit, and FrieslandCampina Wamco Nigeria Plc appreciated by 23 Kobo appreciation to sell at N60.23 per share versus N60.00 per share.
It was observed that yesterday, the price of Golden Capital Plc went down by N1.05 to N9.45 per unit from N10.50 per unit, and UBN Propertiy Plc declined by 21 Kobo to N2.01 per share from the N2.22 per share it was traded a day earlier.
There was a significant improvement in the level of activity for the day, as the volume of transactions increased by 6.2 per cent to 37.4 million units from the previous day’s 35.2 million units, the value of trades went up by 265.1 per cent to N4.9 billion from N1.4 billion, and the number of deals soared by 13.80 per cent to 33 deals from 29 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the last trading day of this week as the most active stock by value on a year-to-date basis with 5.8 billion units valued at N16.4 billion, the second spot was taken by Okitipupa Plc with 178.9 million units traded for N9.5 billion, and third space was occupied by a new comer in MRS Oil Plc with 36.1 million units worth N4.9 billion.
InfraCredit Plc also finished the session as the most active 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 valued at N420.3 million, and Impresit Bakolori Plc with 537.0 million units sold for N524.9 million.
By Dipo Olowookere
The bullish run on the Nigerian Exchange (NGX) Limited continued on Friday with a further 1.00 per cent growth buoyed by gains recorded by Guinness Nigeria, Champion Breweries, and others.
Data showed that the consumer goods space expanded by 1.53 per cent during the last trading session of the week, as the insurance counter grew by 0.51 per cent, and the industrial goods sector marginally gained 0.01 per cent.
However, the banking index depreciated by 0.54 per cent due to a pocket of profit-taking, and the energy industry shrank by 0.09 per cent, while the commodity sector closed flat.
Guinness Nigeria gained 10.00 per cent to trade at N217.80, Morison Industries rose by 9.84 per cent to N4.69, Champion Breweries jumped by 9.69 per cent to N14.15, Austin Laz grew by 9.66 per cent to N2.27, and C&I Leasing appreciated by 9.62 per cent to N5.70.
Conversely, eTranzact lost 10.00 per cent to finish at N12.60, Chellarams slumped by 9.00 per cent to N13.20, Eunisell depleted by 9.89 per cent to N75.15, Africa Prudential moderated by 9.77 per cent to N12.00, and DAAR Communications decreased by 9.18 per cent to 89 Kobo.
The busiest stock on Friday was Access Holdings with 107.6 million units sold for N2.2 billion, Consolidated Hallmark traded 59.9 million units worth N245.8 million, Zenith Bank transacted 48.2 million units valued at N3.1 billion, Transcorp Power transacted 42.8 million units for N13.1 billion, and Champion Breweries exchanged 36.4 million units valued at N510.2 million.
At the close of business, a total of 602.8 million units worth N30.7 billion exchanged hands in 20,550 deals yesterday, in contrast to the 529.7 million units valued at N12.3 billion traded in 18,159 deals on Thursday, representing a surge in the trading volume, value, and number of deals by 13.80 per cent, 149.59 per cent, and 13.17 per cent apiece.
Business Post reports that the All-Share Index (ASI) soared during the session by 1,485.89 points to 149,436.48 points from 147,950.59 points and the market capitalisation moved up by N945 billion to N95.264 trillion from N94.319 trillion.
By Adedapo Adesanya
An intervention of the Central Bank of Nigeria (CBN) in the foreign exchange (FX) market eased the pressure on the Naira on Friday.
The apex bank sold forex to banks and other authorised dealers in the official window to defend the domestic currency, helping to calm the FX demand pressure, with the Nigerian currency appreciating against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) by 0.11 per cent or N1.57 to sell at N1,454.50/$1 compared with Thursday’s closing price of N1,456.07/$1.
Also, the domestic currency improved its value against the Pound Sterling in the official market yesterday by N3.95 to close at N1,946.15/£1 versus the previous day’s N1,950.11/£1 but lost 10 Kobo on the Euro to quote at N1,706.46/€1 compared with the N1,706.36/€1 it was exchanged a day earlier.
At the black market segment, the Nigerian Naira maintained stability against the Dollar during the session at N1,470/$1 and also traded flat at N1,463/$1 at the GTBank forex counter.
Despite the sigh of relief, demand pressures outweighed the robust supply from the CBN and inflow from offshore players looking to participate at the OMO bills auction.
Gross FX reserves increased for the twenty fifth consecutive week, growing by a strong $396.84 million week-on-week to $45.44 billion.
As for the cryptocurrency market, it was down on Friday as pressure remained after Federal Reserve chair Jerome Powell’s speech on Wednesday, which hinted at a possible rate cut pause in January. As a result, markets now expect only two rate cuts in 2026 instead of three.
However, Chicago Federal Reserve President Austan Goolsbee, who was against a December rate cut, said he expects more in 2026 than the current median projection.
Ethereum (ETH) slumped by 5.1 per cent to $3,090.61, Solana (SOL) declined by 4.5 per cent to $132.79, Cardano (ADA) depreciated by 3.8 per cent to $0.4103, and Dogecoin (DOGE) dropped 2.5 per cent to trade at $0.1373.
In addition, Bitcoin (BTC) lost 2.4 per cent to sell at $90,342.74, Litecoin (LTC) tumbled by 1.9 per cent to $81.86, Binance Coin (BNB) fell by 0.6 per cent to $886.93, and Ripple (XRP) slipped by 0.5 per cent to $2.02, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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