AXA Mansard Insurance plc, a member of the AXA Group, announces its financial results for the third quarter ended September 30, 2022
- Gross revenue up 19% to ₦58bn
- Property & Casualty up 6% to ₦24bn
- Life & Savings up 55% to ₦12bn
- Health up 19% to ₦23bn
Commenting on the results, Mrs. Ngozi Ola-Israel, the Chief Financial Officer, said “2022 has been a challenging and dynamic year for the business occasioned by heightened levels of inflation and consequent impact on businesses and households. Despite these, we delivered double-digit revenue growth of 19% YoY from ₦48.8bn to ₦57.9bn and 19% YoY net premium income growth from 27.1bn to 34.7bn at the end of the third quarter of the year. We remain strongly focused on disciplined execution of our portfolio growth ambitions and have delivered 6%, 55% and 19% growth on our P&C, Life and Health businesses respectively. This performance further reinforces our resilience and capacity to produce sustainable results. We advanced with our focus on profitability also with profits before tax for the insurance business growing by 6% YoY while the Health business commenced recovery in this 3rd quarter and is positioned to record profits for the full year. Investment incomes provided strong support for the group performance as well, growing 29% YoY
Commenting on the results at the end of the third quarter of 2022, the Chief Executive Officer of AXA Mansard Insurance Mr. Kunle Ahmed, said “Despite the challenges within the business operating environment, the company’s performance reaffirms the company’s resilience and its strategy for long term growth and sustainable strong performance with a focus on identifying new growth areas in our markets, strengthening our partnerships, and refining our distribution strategy as we grew revenues by 19%. With our focus on prioritization and efficiency we are taking steps to strengthen our balance sheet as well as our underwriting and claims management processes. Looking forward to 2023, the last quarter of the year presents a crucial opportunity to consolidate on our wins and all other measures that will help us navigate the current economic environment whilst we continue to take strategic steps to keep advancing as an exceptional insurer with great financial strength and excellent underwriting capabilities.
Overview of Business Segments-Q3’22
| Key figures Group (in billion Naira, unless otherwise noted) | |||
| Q3 2022 | Q3 2021 | %∆ | |
| Gross revenues (Group) | 57.9 bn | 48.8 bn | ▲ 19% |
| o/w Property & Casualty | 23.6 bn | 22.2 bn | ▲ 6% |
| o/w Life & Savings | 11.9 bn | 7.7 bn | ▲ 55% |
| o/w Health | 22.7 bn | 19.1 bn | ▲ 19% |
Gross revenues: grow 19% YoY (58bn vs 49bn) driven by P&C (+6%), L&S (+55%) and Health (+19%). We continued to leverage on strength in CL P&C (+6%) despite prior year one-offs, consolidated on strong foundation to spur growth in Life, growing (+55%) and ensured strong focus on opportunity segments, growing health double digit (+19%).
Property and Casualty
| Key figures P&C (in billion Naira, unless otherwise noted) | |||
| Q3 2022 | Q3 2021 | %∆ | |
| Gross revenues (P&C) | 23.6 bn | 22.2 bn | ▲ 6% |
| o/w Fire | 3.2 bn | 3.0 bn | ▲ 4% |
| o/w Accident | 2.1 bn | 1.7 bn | ▲ 22% |
| o/w Motor | 2.1 bn | 2.2 bn | ▼ 2% |
| o/w Marine | 0.6 bn | 0.6 bn | ▼ 7% |
| o/w Engineering | 0.5 bn | 1.9 bn | ▼ 76% |
| o/w Oil & Energy | 13.4 bn | 11.4 bn | ▲ 18% |
| o/w Aviation | 1.7 bn | 1.5 bn | ▲ 18% |
P&C improves 6% YoY due to major improvements from the Energy portfolio (18% growth YoY) with personal line revenues improving 3% YoY (1.61bn vs 1.56bn) and the commercial lines improving 6% YoY (22.0bn vs 20.7bn) due to client retention and acquisition of new businesses. The engineering portfolio dip is driven by one-off unrenewable transactions in prior year. We remain intent on ensuring improved performance on personal lines, including motor and we have instituted action plans to manage this segment.
Life and Savings
| Key figures L&S (in billion Naira, unless otherwise noted) | |||
| Q3 2022 | Q3 2021 | %∆ | |
| Gross revenues (Group) | 11.9 bn | 7.7 bn | ▲ 55% |
| o/w Group Life | 5.7 bn | 5.6 bn | ▲ 26% |
| o/w Individual Life | 4.9 bn | 2.1 bn | ▲ 131% |
L&S business grows 55% and represents significant area of opportunity, spurred by improved performance from the group life (+26%) and Individual life businesses (+131%) largely driven by strong customer retention and influence of new products which has been an attractive proposition to customers. Overall increase in agent network, productivity and improved digital footprint also contributed to the growth in revenues.
Asset Management
| Key figures (in Naira billion, unless otherwise noted) | |||
| Q3 2022 | Q3 2021 | %∆ | |
| Gross Revenues | 0.8 bn | 0.6 bn | ▲ 29% |
| Gross AUMs | 125.0 bn | 100.4 bn | ▲ 25% |
| o/w Own AuMs | 70.0 bn | 52.3 bn | ▲ 34% |
| o/w 3rd Party AuMs | 55.1 bn | 48.1 bn | ▲ 14% |
Total revenues improve 29% YoY (0.8bn vs 0.6bn), with higher management fees benefiting from improved Asset under management for corporate clients as well as uptick in interest rates following CBN tightening policies. Average Assets under management amounted to ₦125 billion, improving 25% owing primarily to growth in 3rd party AUMs (+34%).
Operating Performance
| Key figures (in Naira billion, unless otherwise noted) | |||
| Q3 2022 | Q3 2021 | %∆ | |
| Profit Before Tax (Group) | 2.9 bn | 5.0 bn | ▼ 43% |
| o/w Property & Casualty | 2.1 bn | 2.2 bn | ▲ 6% |
| o/w Life & Savings | 2.1 bn | 1.7 bn | ▲ 23% |
| o/w Health | (0.1 bn) | 2.6 bn | NA |
Overall PBT declined 43% vs. Q321 mainly driven by high frequencies and severity in the health business which in Q3 has now started to recover. Loss before tax for Health at the end of Q3 was N100m coming from a loss of N498m in H1 showing a strong recovery and clear path to profitability for the full year. We remain market leaders in the health segment with strong focus on providing excellent service to our customers and partnering with the Health Providers. Slight decline in P&C (-6%) is driven by higher reinsurance costs while the growth in L&S (+23%) vs. LY is largely attributed to improved revenue performance and investment income coupled with strong drive on operational efficiency.
Profit Before Tax (Group)* includes intercompany eliminations
| Key figures (in Naira billion, unless otherwise noted) | |||
| Q3 2022 | Q3 2021 | %∆ | |
| Underlying earnings (Group) | 1.9 bn | 3.1 bn | ▼ 39% |
| o/w Property & Casualty | 1.9 bn | 1.8 bn | ▲ 3 % |
| o/w Life & Savings | 2.2 bn | 1.3 bn | ▲ 68% |
| o/w Health | (0.6 bn) | 1.8 bn | ▼ 132% |
Underlying earnings declined 39% compared to Q321; primarily due to worsening claims experience on the health business, resulting to a decline (-132% YoY). Key steps including enhanced management of fraud, waste and abuse, better claims adjudication are in place to improve the efficiency of underwriting processes and claims management.
P&C (+3%) and L&S (+68%) earnings YoY improvement is influenced by improved underwriting excellence on the back of improved earned premiums, strong growth in investment income and operating expense management.
Financial Highlights and Ratios
Income Statement Highlights
- Gross Written Premium of ₦57.9bn, up 19% from ₦47.8bn in September 2021
- Net Premium Income of ₦34.7bn, up 28% from ₦27.1bn in September 2021
- Investment and Other Income of ₦4.2bn, up 29% from ₦3.3bn in September 2021
- Operating Expenses of ₦7.5bn, up 20% ₦6.3bn in September 2021
- Profit before Tax of ₦2.9bn, declining 43% from ₦5.0bn in September 2021
- Profit after Tax of ₦1.7bn, declining 55% from ₦3.8bn in September 2021
Statement of Financial Position Highlights
- Total Assets of ₦108.4bn, up 4% from ₦104.1bn as of December 2021
- Insurance Liabilities of ₦47.0bn, up 39% from ₦36.9bn as of December 2021
- Group Shareholders’ Funds of ₦28.2bn, down 6% from ₦30.1bn as of December 2021
- Insurance Shareholders’ Funds of ₦25.7bn, up 2% from ₦25.1bn as of December 2021
Key Ratios
- Operating Expense Ratio of 14.3% (September 2021: 15.5%)
- Underwriting Expense Ratio of 8% (September 2021: 8%)
- Loss / Claims Ratio of 48% (September 2021: 53%)
- Re-Insurance Cost Ratio of 28% (September 2021: 20%)
- Return on Average Equity of 6% (September 2021: 12%)
- Return on Average Asset of 3% (September 2021: 5%)
- Earnings per Share of ₦0.17k ((September 2021: ₦0.40k)
Summary Financial Statements
| Key figures (in billion Naira, unless otherwise noted) | |||||||
| GROUP | FY21 | Q3 22 | % Δ vs. FY 2021 | ||||
| Asset | 104.1 bn | 106.2 bn | + 2% | ||||
| Cash and cash equivalent | 17.3 bn | 17.3 bn | – 0% | ||||
| Investment securities | 43.1 bn | 36.3 bn | – 16% | ||||
| Loan and receivables | 1.7 bn | 0.4 bn | – 76% | ||||
| PPE & Intangible assets | 3.2 bn | 3.5 bn | + 10% | ||||
| Statutory dep., RI assets & other | 38.7 bn | 48.7 bn | + 26% | ||||
| o/w Claims Recoverables (Incl IBNR) | 5.9 bn | 6.0 bn | + 0% | ||||
| Liabilities | 69.7 bn | 73.5 bn | + 5% | ||||
| Insurance contract liabilities | 36.9 bn | 47.0 bn | + 27% | ||||
| o/w Outstanding Claims (Incl IBNR) | 20.0 bn | 24.7 bn | + 23% | ||||
| o/w Unearned Premiums (p&c + health) | 16.9 bn | 22.3 bn | + 32% | ||||
| Investment contract liabilities | 11.2 bn | 7.7 bn | – 32% | ||||
| o/w Life Savings | 5.6 bn | 4.1 bn | – 27% | ||||
| o/w Life Investment Plan | 4.4 bn | 2.7 bn | – 38% | ||||
| o/w Bonus Life | 1.2 bn | 0.8 bn | – 33% | ||||
| Trade and other liabilities | 20.6 bn | 17.9 bn | – 13% | ||||
| Deferred tax liability | 0.9 bn | 1.0 bn | + 3% | ||||
| Equity | 34.4 bn | 32.7 bn | – 4% |
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: We continued to digitize our client’s journeys by introducing tools to enhance collaboration with our partners, including brokers and NSE Dealers. Combined sales from digital channels totals ₦1.48b. Key highlights of our digitization journey are seen below;
- USSD: We enhanced our USSD Channel (*987#) to give clients greater control of their experience, introducing the doctor Call-back features and adding web payment option. We have also broadened our reach with the implementation of the USSD flow for more service providers
- Automated Feedback Framework: To also continue to ensure that we provide seamless service to our clients, we deployed an automated provider feedback system to enable internal real-time view & periodic feedback to providers.
- MyAXA Plus app: Additionally, we continued to optimize our Mobile app (MY AXA) by introducing new features such as the ability to filter hospitals by specialization, track claims, hospital booking, view hospital visit details, download statements.
Rating
AM Best: 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 February 18, 2022. 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.
