Babatunde Fajemirokun December 19, (THEWILL) – Directors of AIICO Insurance Plc, one of Nigeria’s topmost insurance firms, received a total emolument of N290.881 million in 2020, the year that COVID-19 spread human suffering and destabilised the global economy in the worst dimension in a century. A study of the firm’s performance records showed that the figure was the highest remuneration paid to its directors since 1990, when AIICO Insurance was listed on the Nigerian Exchange as a public limited company. It was established in 1963 as a private enterprise.
The latest directors’ emolument was N93.241 million higher than the N197.683 million paid in the preceding year (2019) representing 47.1 percent. Over the last five years, the pay received by the directors rose from N197.683 million in 2017 to N198.111 million in 2018. No figure was recorded for 2016. The 2020 directors’ emolument, however, constituted only 3.84 percent of total operating expenses for the year – N7.552 billion which, on the other hand, was higher than the 2019 figure of N6.038 billion by 25 percent.
Profit after tax (PAT) in 2020 when the directors received the highest pay within three decades dropped to N4.980 billion from N5.718 billion in 2019 or 12.23 percent. The post-tax profit rose to N3.151 billion in 2018 from only N1.283 billion in the previous year. Profit before tax dropped to N4.632 billion in 2020 from N5.718 billion in 2019, representing 23.64 percent decline.
The firm’s gross premium income and net premium income recorded positive performance in 2020 to N60.680 billion and N52.779 billion, from N50 billion and N43.776 billion respectively. Net underwriting income also jumped from N45.643 billion in 2019 to N54.742 billion in 2020.
“Notwithstanding the drop in profit after tax, the other key fundamentals showed positive performance which could explain the quantum leap in directors’ remuneration for 2020. Remember it was a difficult year for businesses that also suffered the 15-month land border closure imposed by the Nigerian government which it said was meant to curb smuggling but ended up killing businesses while smuggling continued to thrive”, said Kenneth Agbamuche, an insurance practitioner.
Agbamuche told THEWILL that the performance of the insurance sector in 2020 was a corporate paradox that was yet to be resolved. “Not only in Nigeria, the insurance sector improved in the stock performance in most parts of the globe during the pandemic unlike other businesses that witnessed huge shrinkage, especially those in the consumer […]