AXA Mansard Insurance plc, a member of the AXA Group, announces its financial results for the full year ended December 31, 2022
- Gross revenue up 15% to ₦69bn
- Property & Casualty down 3% to ₦27bn
- Life & Savings up 49% to ₦13.8bn
- Health up 22% to ₦27.7bn
Commenting on the results, Mrs. Ngozi Ola-Israel, the Chief Financial Officer, said “Despite the macroeconomic challenges the business faced in the 2022 financial year, we delivered strong double digit revenue growth of 15% YoY from ₦60.2bn to ₦69.0bn and net premium income growth of 24% YoY from ₦37.1bn to ₦46.1bn. We have remained focused in our growth plan across business lines by delivering 49% and 22% growth on our Life and Health businesses respectively while the P&C 3% decline was driven by deliberate selection of risks to drive profitability. The decline of 42% and 35% respectively in the PBT and PAT is driven by the higher claims experience in our health portfolio as well as fair value losses on our investment property. We made significant recoveries in H2 2022 with the health business moving from break even position to closing with profits of 0.3bn at the end of the year. We have taken all necessary steps to strengthen our balance sheet and have set the right platform for continued profitability in 2023.”
Overview of Business Segments-FY’22
| Key figures (in Naira billion, unless otherwise noted) | |||
| FY 2022 | FY 2021 | %∆ | |
| Gross revenues (Group) | 69.0 bn | 60.2 bn | ▲ 15% |
| o/w Property & Casualty | 27.4 bn | 28.3 bn | ▼ 3% |
| o/w Life & Savings | 13.8 bn | 9.2 bn | ▲ 49% |
| o/w Health | 27.7 bn | 22.7 bn | ▲ 22% |
Gross revenues: grew 15% YoY (69bn vs 60.2bn). Growth was driven by L&S (+49%) and Health (+22%) although P&C declines 3% owing to one off impacts regarding a non-renewable transaction and change in timing of booking of another transaction in the CL P&C portfolio. Life volumes acceleration is spurred by fast onboarding of the new life savings product. Health volumes improves owing to the impact of increased premium and renewal for key commercial line clients.
Property and Casualty
| Key figures (in Naira billion, unless otherwise noted) | |||
| FY 2022 | FY 2021 | %∆ | |
| Gross revenues (P&C) | 27.4 bn | 28.3 bn | ▼ 3% |
| o/w Fire | 4.1 bn | 4.0 bn | ▲ 3% |
| o/w Accident | 2.4 bn | 2.0 bn | ▲ 20% |
| o/w Motor | 2.8 bn | 2.8 bn | ▲ 1% |
| o/w Marine | 0.7 bn | 0.8 bn | ▼ 8% |
| o/w Engineering | 0.6 bn | 1.9 bn | ▼ 69% |
| o/w Oil & Energy | 14.7 bn | 14.7 bn | ▼ 0% |
| o/w Aviation | 2.1 bn | 2.0 bn | ▲ 1% |
P&C declines 3% YoY due to non-recurrence of premiums from commercial lines which declined 6% YoY (24.7bn vs 26.3bn). The decline is driven by shortfalls in the Engineering and marine portfolios while oil & energy remained flat. The engineering dip is driven by one-off unrenewable transactions in prior year. The group remains committed to ensuring improved performance through an improved distribution network, process automation and client retention.
Life and Savings
| Key figures (in Naira billion, unless otherwise noted) | |||
| FY 2022 | FY 2021 | %∆ | |
| Gross revenues (Group) | 13.8 bn | 9.2 bn | ▲ 49% |
| o/w Group Life | 7.3 bn | 6.1 bn | ▲ 20% |
| o/w Individual Life | 6.5 bn | 3.2 bn | ▲ 107% |
L&S business grows 49% YoY driven by improved performance in the group life (+20%) and individual life businesses (+107%). The life and savings business has experienced strong customer retention and sales drive from the launch of the new life savings product. Overall, improved agent productivity and digital footprint also contributed to the growth in revenues.
Asset Management
| Key figures (in Naira billion, unless otherwise noted) | |||
| FY 2022 | FY 2021 | %∆ | |
| Gross Revenues | 1.1 bn | 0.9 bn | ▲ 18% |
| Gross revenues (AUMs) | 126.3 bn | 118.8 bn | ▲ 6% |
| o/w Own AuMs | 53.0 bn | 55.6 bn | ▼ 5% |
| o/w 3rd Party AuMs | 73.3 bn | 63.2 bn | ▲ 16% |
Total revenues improved 18% YoY, with higher management fees benefiting from improved 3rd party asset under management. AuMs for corporate clients grew 51% as clients count grew by 21% leading to a 16% growth in 3rd party AuMs and 6% growth in total AuMs
Operating Performance
| Key figures (in Naira billion, unless otherwise noted) | |||
| FY 2022 | FY 2021 | %∆ | |
| Profit Before Tax (Group) | 3.4 bn | 5.8 bn | ▼ 42% |
| o/w Property & Casualty | 3.4 bn | 2.7 bn | ▲ 23% |
| o/w Life & Savings | 1.8 bn | 0.3 bn | ▲ 448% |
| o/w Health | 0.3 bn | 3.2 bn | ▼ 90% |
Overall, PBT declined by 42% YoY driven by the high claims experience in the health business. The Health business commenced recovery in H2 2022 and was able to deliver profits above N300mn at the end of the year. We have remained market leaders in the health segment with a strong focus on providing excellent customer experience while partnering with health providers. Growth in P&C (+23%) vs. LY is attributable to improved net premium income, investment income and reduced claims. L&S grew 448% YoY due to improved revenue performance and investment income coupled with strong drive on operational efficiency.
Financial Highlights and Ratios
Income Statement Highlights
- Gross Written Premium of N69.0bn, up 15% from N60.2bn in December 2021
- Net Premium Income of N46.1bn, up 24% from N37.1bn in December 2021
- Investment and Other Income of N6.5bn, up 5% from N6.3bn in December 2021
- Operating Expenses of N11bn, up 17% N9.4bn in December 2021
- Profit before Tax of N3.4bn, declining 42% from N5.8bn in December 2021
- Profit after Tax of N2.4bn, declining 35% from N3.7bn in December 2021
Statement of Financial Position Highlights
- Total Assets of N106.2bn, up 2% from N104.1bn as of December 2021
- Insurance Liabilities of N44.8bn, up 21% from N36.9bn as of December 2021
- Group Shareholders’ Funds of N29.0bn, down 4% from N30.1bn as of December 2021
- Insurance Shareholders’ Funds of N26.0bn, up 4% from N25.1bn as of December 2021
Key Ratios
- Operating Expense Ratio of 15.9% (December 2021: 16.9%)
- Underwriting Expense Ratio of 8% (December 2021: 8.6%)
- Loss / Claims Ratio of 54.9% (December 2021: 51.9%)
- Re-Insurance Cost Ratio of 23% (December 2021: 21.7%)
- Return on Average Equity of 11.4% (December 2021: 18.1%)
- Return on Average Asset of 3.2% (December 2021: 5.8%)
- Earnings per Share of ₦0.29k (December 2021: ₦0.35k)
SUMMARY Financial sTATEMENTS
| Key figures (in billion Naira, unless otherwise stated) | ||||
| GROUP | FY21 | FY 22 | % ∆ vs. FY 2021 | |
| Asset | 104.1 bn | 106.2 bn | + 2% | |
| Cash and cash equivalent | 17.3 bn | 13.5 bn | – 22% | |
| Investment securities | 43.1 bn | 43.5 bn | + 1% | |
| Loan and receivables | 1.7 bn | 3.8 bn | + 128% | |
| PPE & Intangible assets | 3.2 bn | 3.5 bn | + 11% | |
| Statutory dep., RI assets & other | 38.7 bn | 42.0 bn | + 8% | |
| o/w Claims Recoverable (Incl. IBNR) | 5.9 bn | 9.2 bn | + 55% | |
| Liabilities | 69.7 bn | 73.1 bn | + 5% | |
| Insurance contract liabilities | 36.9 bn | 44.8 bn | + 21% | |
| o/w Outstanding Claims (Incl. IBNR) | 20.0 bn | 28.4 bn | + 42% | |
| o/w Unearned Premiums (P&C + health) | 16.9 bn | 16.4 bn | – 3% | |
| Investment contract liabilities | 11.2 bn | 6.7 bn | – 40% | |
| o/w Life Savings | 5.6 bn | 3.5 bn | – 38% | |
| o/w Life Investment Plan | 4.4 bn | 2.5 bn | – 43% | |
| o/w Bonus Life | 1.2 bn | 0.7 bn | – 43% | |
| Trade and other liabilities | 20.6 bn | 20.7 bn | + 1% | |
| Deferred tax liability | 0.9 bn | 0.9 bn | – 8% | |
| Equity | 34.4 bn | 33.1 bn | – 4% | |
| Key figures (in billion Naira, unless otherwise noted) | |||
| GROUP P&L | FY 22 | FY 21 | FY 22 vs. FY 21 |
| Gross written premium | 69.0 bn | 60.2 bn | 15% |
| Gross premium income | 69.4 bn | 55.7 bn | 25% |
| Re-insurance expenses | (23.3 bn) | (18.6 bn) | 25% |
| Net premium income | 46.1 bn | 37.1 bn | 24% |
| Fee and commission on insurance contracts | 2.4 bn | 1.9 bn | 29% |
| Net underwriting income | 48.5 bn | 39.0 bn | 24% |
| Claims expenses (gross) | (38.1 bn) | (28.9 bn) | 32% |
| Claims expenses recovered from reinsurers | 4.9 bn | 4.6 bn | 7% |
| Underwriting expenses | (5.6 bn) | (4.8 bn) | 16% |
| Changes in individual life reserves | (1.8 bn) | (1.6 bn) | 15% |
| Changes in annuity reserves | 0.2 bn | 0.9 bn | -81% |
| Net underwriting expenses | (40.4 bn) | (29.8 bn) | 36% |
| Total underwriting profit | 8.1 bn | 9.2 bn | -12% |
| Investment income | 6.6 bn | 5.1 bn | 30% |
| Net gains/(losses) on financial instruments | 0.6 bn | (0.0 bn) | -1440% |
| Profit on investment contracts | 0.4 bn | 0.2 bn | 74% |
| Other income | 0.2 bn | 0.9 bn | -74% |
| Total investment income | 6.5 bn | 6.3 bn | 5% |
| Expenses for marketing and administration | (1.7 bn) | (1.5 bn) | 8% |
| Employee benefit expense | (4.9 bn) | (3.7 bn) | 31% |
| Other operating expenses | (4.2 bn) | (4.1 bn) | 3% |
| Results of operating activities | 3.7 bn | 6.1 bn | -40% |
| Finance cost | (0.3 bn) | (0.3 bn) | -4% |
| Profit before tax | 3.4 bn | 5.8 bn | -42% |
| Income tax expense | (0.9 bn) | (2.0 bn) | -54% |
| Profit for the year | 2.4 bn | 3.7 bn | -35% |
Sustainability, Digital and E-Commerce Drive
Sustainability: We demonstrated industry leadership on the sustainability agenda through initiatives such as tree planting and organized webinars aimed at boosting environmental sustainability with a view to driving efforts on improved waste management, carbon emission etc.
Digitization: While combined sales from the digital channel amounted to ₦2.28b, we continued to digitize our customer’s journeys by introducing tools and technologies to improve collaboration with our partners, including brokers and NSE Dealers. Key highlights of our digitization journey are seen below;
- Premium Financing: Starting with our auto classic product, we deployed the premium financing initiative in partnership with a credit/financing company to provide increased accessibility for protection and further improve our customer’s experience.
- Investment Profiler & Non-discretionary portfolio: Additionally, we continued to improve on our website capabilities through the deployment of the investment profiler. This feature is an enhanced risk profiler deployed to enable customers gain real time information on their risk appetite and what portfolio to invest in. The non-discretionary portfolio was also deployed to provide a more tailored investment that suits the unique risk appetite, ROI expectation and objectives of our customers.
- Bills Payment Feature: We enhanced our transactional website to include a bills payment feature. This will enable customers pay bills and utility directly from their MMF & investment accounts.
- MyAXA Wallet: In partnership with a commercial bank, we introduced an additional payment option for insurance on the website using virtual accounts. These virtual accounts function as a wallet that may be funded for ease of paying for insurance products.
AM Best Rating: AXA Mansard Insurance Plc’s Financial Strength Rating of B+ (Good) and Long-Term Issuer Credit Rating of “bbb-” (Good) were affirmed by AM Best on March 10, 2023. The outlook for these Credit Ratings (ratings) is stable, reflecting AXA Mansard’s strong balance sheet, adequate operating performance, limited business profile, and appropriate enterprise risk management, as assessed by AM Best. The ratings also reflect rating enhancement from AXA Mansard’s ultimate parent, AXA S.A.
