AIICO Insurance Plc commenced 2025 on a strong note, demonstrating robust growth in key financial metrics during the first quarter. The company reported a 12% year-on-year surge in gross written premiums, reaching N54.81 billion, a testament to its expanding market share and successful underwriting activities. This growth was fueled by a substantial 45% increase in insurance revenue, which climbed to N32.81 billion compared to N22.67 billion in Q1 2024. The surge in insurance revenue, coupled with improved claims experience, propelled a dramatic 3,237% increase in net income from insurance services, reaching N4.07 billion compared to a modest N121.88 million in the same period of the prior year. This impressive performance indicates AIICO’s effectiveness in both attracting new business and managing its risk portfolio.
While AIICO enjoyed significant revenue growth, the company also experienced a substantial increase in reinsurance contract expenses. These expenses rose by 83% to N8.79 billion, primarily due to higher cessions to reinsurers. This strategic decision to cede more risk likely reflects AIICO’s prudent risk management approach, aiming to balance growth with a sustainable risk profile. Despite the increased reinsurance costs, the overall impact on profitability was mitigated by the substantial growth in insurance revenue.
AIICO’s investment portfolio also contributed positively to its financial performance during the first quarter. Net investment income before fair value changes saw a significant increase of 68%, reaching N12.92 billion compared to N7.67 billion in Q1 2024. This indicates the company’s successful investment strategies and ability to generate returns from its investment portfolio. While the company incurred a fair value loss of N21.47 million, this represented a substantial improvement compared to the N18.56 billion loss recorded in the same quarter of the previous year, suggesting a more stable investment environment and potentially more conservative investment choices.
Further augmenting AIICO’s financial performance was a notable increase in other income, which surged by 136% to N614.35 million. This increase reflects the company’s success in diversifying its income streams and capitalizing on opportunities beyond its core insurance operations. However, the company also experienced a sharp rise in total expenses, which increased by 549% to N3.54 billion. This increase, while substantial, can be attributed to various factors, including investments in growth initiatives, operational expansion, and potentially higher administrative costs associated with increased business volume.
Despite the positive developments in revenue and investment income, the combined effect of increased reinsurance costs and higher total expenses led to a 39% decrease in total comprehensive income, which stood at N4.87 billion compared to N7.98 billion in the prior year. Although this decline may appear concerning, it’s important to consider the context of the substantial investments in growth and risk management, which are expected to contribute to long-term profitability and sustainability. Analyzing the full-year results will provide a more comprehensive understanding of the impact of these strategic decisions.
AIICO’s balance sheet reflected continued growth and a shift in asset allocation. Total assets grew by 6% to N439.72 billion, indicating a healthy expansion of the company’s overall resources. Cash and cash equivalents decreased by 49% to N17.79 billion, possibly reflecting strategic investments and operational expenditures. Concurrently, financial assets increased by 10% to N375.10 billion, suggesting a shift towards longer-term investments and potentially higher-yielding assets. Total liabilities also increased by 5%, reaching N367.13 billion, likely reflecting increased operational obligations and potential borrowings to support growth initiatives. The full-year financial report, including the profit after tax figure of N13.6 billion, representing a 12% increase year-on-year, will provide a more complete picture of AIICO’s financial health and overall performance for the entire fiscal year 2025. This positive year-end result, coupled with the Q1 performance, suggests a company navigating a complex market with both opportunities and challenges.
