AXA Mansard Insurance plc, a member of the AXA Group, announces its financial results for the first half ended June 30, 2022
- Gross revenue up 21% to ₦45bn
- Property & Casualty up 8% to ₦19bn
- Life & Savings up 68% to ₦9bn
- Health up 21% to ₦17bn
Commenting on the results, Mrs. Ngozi Ola-Israel, the Chief Financial Officer, said “We delivered double-digit revenue growth of 21% YoY from ₦45.1bn to ₦37.2bn and 31% YoY net premium income growth from 17.4bn to 22.7bn in the first half of the year despite challenging macro-economic conditions particularly in second quarter of the year. We remained strongly focused on disciplined execution of our portfolio growth ambitions by delivering 8%, 68% and 21% growth on our P&C, Life and Health businesses respectively. This performance further reinforces our resilience and capacity to produce sustainable results. The decline of 59% and 62% respectively in the PBT and PAT is largely driven by higher claims experienced in our health portfolio. We are strengthening all our underwriting and claims management processes while continuing to excel on our investment performance where we grew 94% YoY.
Commenting on AXA Mansard’s financials at the end of the first half of 2022, Mr. Kunle Ahmed, the Chief Executive Officer, AXA Mansard Insurance, said “Despite the business environment’s challenges, our performance reflects our dynamism and focus on identifying new growth areas in our markets, strengthening our partnerships, and refining our distribution strategy as we grew revenues by 21%. We are taking steps to strengthen our balance sheet as well as our underwriting and claims management processes which will translate to increased profitability in the medium term. Looking forward, the second half of the year presents a crucial opportunity to consolidate on our wins 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-H1’22
| Key figures Group (in billion Naira, unless otherwise noted) | |||
| H1 2022 | H1 2021 | %∆ | |
| Gross revenues (Group) | 45.0 bn | 37.2 bn | ▲ 21% |
| o/w Property & Casualty | 19.2 bn | 17.8 bn | ▲ 8% |
| o/w Life & Savings | 8.9 bn | 5.3 bn | ▲ 68% |
| o/w Health | 17.1 bn | 14.2 bn | ▲ 21% |
Gross revenues: grow 21% YoY (45bn vs 37bn) driven by P&C (+8%), L&S (+68%) and Health (+21%). The impact of leveraging on strength in CL P&C (+8%), laying strong foundation to spur growth in Life, growing (+68%) and strong focus on opportunity segments, growing health double digit (+21%); all contributed to the overall growth.
Property and Casualty
| Key figures P&C (in billion Naira, unless otherwise noted) | |||
| H1 2022 | H1 2021 | %∆ | |
| Gross revenues (P&C) | 19.2 bn | 17.8 bn | ▲ 8% |
| o/w Fire | 2.1 bn | 2.1 bn | ▲ 0% |
| o/w Accident | 1.6 bn | 1.2 bn | ▲ 29% |
| o/w Motor | 1.5 bn | 1.4 bn | ▲ 2% |
| o/w Marine | 0.5 bn | 0.4 bn | ▲ 16% |
| o/w Engineering | 0.3 bn | 1.8 bn | ▼ 81% |
| o/w Oil & Energy | 12.0 bn | 9.9 bn | ▲ 21% |
| o/w Aviation | 1.2 bn | 0.9 bn | ▲ 29% |
P&C improves 8% YoY due to major improvements from the Energy portfolio (21% growth YoY) with personal line revenues improving 8% YoY (1.06bn vs 0.98bn) and the commercial lines improving 8% YoY (18.1bn vs 16.2bn) due to client retention and acquisition of new businesses. The engineering portfolio dip is driven by one-off unrenewable transactions in prior year.
Life and Savings
| Key figures L&S (in billion Naira, unless otherwise noted) | |||
| H1 2022 | H1 2021 | %∆ | |
| Gross revenues (Group) | 8.9 bn | 5.3 bn | ▲ 68% |
| o/w Group Life | 5.7 bn | 4.0 bn | ▲ 45% |
| o/w Individual Life | 3.2 bn | 1.4 bn | ▲ 134% |
L&S business grows 68%, due to improved performance from the group life (+45%) and Individual life businesses (+134) largely driven by the impact of new product type (new life savings product; launched in Q4 last year). Overall increase in agent network and productivity also contributed to the growth in revenues.
Asset Management
| Key figures (in Naira billion, unless otherwise noted) | |||
| H1 2022 | H1 2021 | %∆ | |
| Gross Revenues | 0.6 bn | 0.4 bn | ▲ 36% |
| Gross AUMs | 123.1 bn | 90.8 bn | ▲ 36% |
| o/w Own AuMs | 56.6 bn | 43.0 bn | ▲ 31% |
| o/w 3rd Party AuMs | 66.5 bn | 47.7 bn | ▲ 39% |
Total revenues improve 36% YoY (0.6bn vs 0.4bn), with higher management fees benefiting from improved Asset under management. Assets under management amounted to ₦123 billion, improving 36% owing primarily to growth in Own AUMs (+31%) and 3rd Party AUMs (+39%).
Digital Contribution
| Key figures (in Naira billion, unless otherwise noted) | |||
| H1 2022 | H1 2021 | %∆ | |
| Gross Premiums (Digital Channels) | 0.52 bn | 0.47 bn | ▲ 11% |
Premiums generated via our online channels improves 11%.
Operating Performance
| Key figures (in Naira billion, unless otherwise noted) | |||
| H1 2022 | H1 2021 | %∆ | |
| Profit Before Tax (Group) | 1.3 bn | 3.2 bn | ▼ 59% |
| o/w Property & Casualty | 1.9 bn | 1.6 bn | ▲ 14% |
| o/w Life & Savings | 1.8 bn | 1.8 bn | ▲ 4% |
| o/w Health | (0.5 bn) | 1.8 bn | ▼128% |
Overall PBT declined 59% vs. HY21; mainly due to worsening claims on the Health business (-128% YoY) as gross claims grow 53% YoY on the back of increased cost of care and increased expenses. Fundamentals of the health business remain strong while activities are in place to improve the efficiency of underwriting processes and claims management. Growth in P&C (+14%) and L&S (4%) vs. LY is largely attributed to improved revenue performance and investment income coupled with strong drive on operational efficiency.
| Key figures (in Naira billion, unless otherwise noted) | |||
| H1 2022 | H1 2021 | %∆ | |
| Underlying earnings (Group) | 1.7 bn | 2.2 bn | ▼ 25% |
| o/w Property & Casualty | 1.9 bn | 1.7 bn | ▲ 16% |
| o/w Life & Savings | 2.0 bn | 1.5 bn | ▲ 31% |
| o/w Health | (0.5 bn) | 1.3 bn | ▼138% |
Overall UE declined 25% compared to HY21; primarily due to worsening claims experience on the Health business, with the Health business declining (-138% YoY). Fundamentals of the health business remain strong while activities are in place to improve the efficiency of underwriting processes and claims management. P&C earnings (+16%) and L&S earnings (+31%) grew YoY on the back of improved earned premiums and underwriting performance.
Financial Highlights and Ratios
Income Statement Highlights
- Gross Written Premium of N44.97bn, up 21% from N37.18bn in June 2021
- Net Premium Income of N22.75bn, up 31% from N17.42bn in June 2021
- Investment and Other Income of N2.42bn, up 94% from N1.24bn in June 2021
- Operating Expenses of N4.87bn, up 10% N4.41bn in June 2021
- Profit before Tax of N1.30bn, declining 59% from N3.16bn in June 2021
- Profit after Tax of N0.87bn, declining 62% from N2.29bn in June 2021
Statement of Financial Position Highlights
- Total Assets of N119.78bn, up 15% from N104.06bn as of December 2021
- Insurance Liabilities of N51.32bn, up 39% from N36.93bn as of December 2021
- Group Shareholders’ Funds of N31.26bn, up 4% from N30.07bn as of December 2021
- Insurance Shareholders’ Funds of N29.05bn, up 16% from N25.114bn as of December 2021
Key Ratios
- Operating Expense Ratio of 14% (June 2021: 17%)
- Underwriting Expense Ratio of 8% (June 2021: 8%)
- Loss / Claims Ratio of 50% (June 2021: 47%)
- Re-Insurance Cost Ratio of 27% (June 2021: 23%)
- Return on Average Equity of 3% (June 2021: 7%)
- Return on Average Asset of 1% (June 2021: 3%)
- Earnings per Share of 9k (June 2021: 6k)
Summary Financial Statements
| Key figures (in billion Naira, unless otherwise noted) | |||||||
| GROUP | FY21 | H1 22 | Growth vs. FY 2021 | ||||
| Asset | 104.1 bn | 119.8 bn | + 15% | ||||
| Cash and cash equivalent | 17.3 bn | 17.5 bn | + 1% | ||||
| Investment securities | 43.1 bn | 39.0 bn | – 9% | ||||
| Loan and receivables | 1.7 bn | 0.6 bn | – 63% | ||||
| PPE & Intangible assets | 3.2 bn | 3.5 bn | + 9% | ||||
| Statutory dep., RI assets & other | 38.7 bn | 59.1 bn | + 53% | ||||
| o/w Claims Recoverables (Incl IBNR) | 5.9 bn | 6.2 bn | + 4% | ||||
| Liabilities | 69.7 bn | 84.2 bn | + 21% | ||||
| Insurance contract liabilities | 36.9 bn | 51.3 bn | + 39% | ||||
| o/w Outstanding Claims (Incl IBNR) | 20.0 bn | 24.2 bn | + 21% | ||||
| o/w Unearned Premiums (p&c + health) | 16.9 bn | 27.2 bn | + 61% | ||||
| Investment contract liabilities | 11.2 bn | 10.2 bn | – 10% | ||||
| o/w Life Savings | 5.6 bn | 4.4 bn | – 21% | ||||
| o/w Life Investment Plan | 4.4 bn | 4.5 bn | + 2% | ||||
| o/w Bonus Life | 1.2 bn | 1.3 bn | + 3% | ||||
| Trade and other liabilities | 20.6 bn | 21.8 bn | + 6% | ||||
| Deferred tax liability | 0.9 bn | 0.9 bn | – 2% | ||||
| Equity | 34.4 bn | 35.6 bn | + 4% |
| Key figures (in billion Naira, unless otherwise noted) | ||||||
| GROUP P&L | HY 22 | HY 21 | HY 22 vs. HY 21 | |||
| Gross written premium | 45.0 bn | 37.2 bn | 21% | |||
| Gross premium income | 34.7 bn | 25.9 bn | 34% | |||
| Re-insurance expenses | (12.0 bn) | (8.5 bn) | 41% | |||
| Net premium income | 22.7 bn | 17.4 bn | 31% | |||
| Fee and commission on insurance contracts | 1.4 bn | 1.1 bn | 32% | |||
| Net underwriting income | 24.2 bn | 18.5 bn | 31% | |||
| Claims expenses (gross) | (17.3 bn) | (12.3 bn) | 41% | |||
| Claims expenses recovered from reinsurers | 1.2 bn | 1.4 bn | -13% | |||
| Underwriting expenses | (2.7 bn) | (2.2 bn) | 26% | |||
| Changes in individual life reserves | (1.5 bn) | 0.2 bn | -949% | |||
| Changes in annuity reserves | (0.0 bn) | 0.9 bn | -101% | |||
| Net underwriting expenses | (20.3 bn) | (11.9 bn) | 70% | |||
| Total underwriting profit | 3.9 bn | 6.6 bn | -41% | |||
| Investment income | 2.9 bn | 2.4 bn | 22% | |||
| Net gains/(losses) on financial instruments | (0.7 bn) | (1.5 bn) | -51% | |||
| Profit on investment contracts | 0.1 bn | 0.3 bn | -48% | |||
| Other income | 0.0 bn | 0.0 bn | 1098% | |||
| Total investment income | 2.4 bn | 1.2 bn | 94% | |||
| Expenses for marketing and administration | (0.8 bn) | (0.9 bn) | -11% | |||
| Employee benefit expense | (2.1 bn) | (1.6 bn) | 34% | |||
| Other operating expenses | (1.9 bn) | (1.9 bn) | 2% | |||
| Results of operating activities | 1.4 bn | 3.4 bn | -58% | |||
| Finance cost | (0.1 bn) | (0.2 bn) | -45% | |||
| Profit before tax | 1.3 bn | 3.2 bn | -59% | |||
| Income tax expense | (0.4 bn) | (0.9 bn) | -51% | |||
| Profit for the year | 0.9 bn | 2.3 bn | -62% | |||
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. 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 track claims, contributions for life Savings, 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.
