AIICO Shareholders Poised For Juicier Dividend, As Half-Year Profit Up 52%

Shareholders of AIICO Insurance Plc have reasons to be expectant of a better full-year dividend payout if the company sustains its performance rate achieve as of the half-year score-card released on Monday, indicating that net profit grew faster than premium income. This was despite the 742% rise in underwriting loss.
According to the result, gross premium written increased by N6.125bn or 32% from N19.296bn in the first half of 2018 to N25.422bn, out of which the life business contributed N17.941bn, from the previous N12.809bn; followed by N7.103bn from the general business, up from N6.103bn. Gross premium income stood at N23.385bn, up by N6.327bn or 37% from N17.058bn. Reinsurance expenses rose marginally from N2.658bn to N2.782bn; leaving a net premium income of N20.603bn, an improvement of N6.203bn or 43%, when compared to the N14.4bn of 2018.
Commission income from insurance contract inched from N561.238m to N654.793m; commission income from pension and other contracts dropped from N977.95m to N802.582m; resulting in net underwriting income of N22.06bn, an improvement from N15.939bn in 2018.
Gross claims expenses for the period rose to N15.707bn from N13.175bn; claims expenses recovered from reinsurers inched to N3.388bn from N2.744bn; as a result of which net claim expenses rose marginally from N11.431bn to N12.318bn.
Underwriting expenses jumped by N1.238bn or 64.75% from N1.912bn in 2018 to N3.15bn; ‘change in life fund’ rose from N2.659bn to N5.88bn; just as a change in annuity fund climbed from N687.545m to N4.209bn; followed by a change in other investment contracts, which rose from a loss of N159.053m to N1.494bn earnings. Total underwriting expenses, therefore, soared to N27.053bn, compared to N16.532bn.
Underwriting loss soared by N4.399bn or 742% to N4.992bn; while investment income climbed to N5.326bn from N4.206bn; net realized gains dropped from N2.038bn to N1.221bn; net fair value gains soared to N6.295bn from N505.933m. Other operating expenses stood at N2.546bn from N2.621bn; personnel expenses climbed to N2.175bn from N1.785bn; which among others increased profit before tax by N922.031m or 42% from N2.196bn to N3.118bn. With income taxes dropping to N174.982m from N263.632m; profit after tax increased by N1.01bn or 52% to N2.943bn, as against the previous N1.933bn. Other comprehensive loss nets of tax increased by 42% from N183.867m to N261.462m; resulting in total comprehensive profit for the interim period of N2.682bn, up from N1.749bn. This resulting in Earnings Per Share of 41 kobo, up from 27 kobo in 2018 half-year.