Axa Mansard’s annual profit shrinks by 22% amid soaring insurance claims

Nigeria’s second biggest insurer by market capitalisation, Axa Mansard Insurance Plc, saw a profit decline of 22 per cent for the financial year 2021 even when its revenue increased by more than a quarter, according to its unaudited financials issued on Sunday.

Gross written premium scaled up to N60.2 billion, up from the N47.6 billion posted the year before largely by reason of remarkable improvement in earnings from its non-life insurance business.

But earnings took a battering from operating expenses after claims expenses spiralled by N7.8 billion to N29 billion and the cash paid by the underwriter to re-insure itself for the year jumped 34.3 per cent.

Axa Mansard paid N16.7 billion of the N29 billion as claims to beneficiaries of health insurance, one of its strategic business units, and there is a strong prospect that the figure for this quarter alone could rise to N6.1 billion, according to forecast by the insurer in December.

Profit before tax narrowed by 13.3 per cent to N6.8 billion while post-tax profit tumbled by more than one-fourth to N4.5 billion.

In September, Axa Mansard completed a share reconstruction that saw its outstanding shares adjusted downward from 36 billion units to 9 billion and their nominal value upward from N0.50 to N2 in line with the ongoing recapitalisation round in the Nigerian insurance space.

The company opened trade in Lagos on Monday at N2.35 per unit, yet to witness any movement as of 13:17 WAT.