Wapic Insurance Plc - Nigeria’s No1 Economy and ... · Wapic Insurance Plc ... • Munich Reinsurance Company Limited ... •Over 20 years in the practice of Law and Insurance

Above & Beyond. Above & Beyond. Proprietary & Confidential

Wapic Insurance Plc Financial Year 2013 Results Presentation to Investors & Analysts

Above & Beyond.

Disclaimer

The information presented herein is based on sources which Wapic Insurance Plc (THE “Company”) regards dependable.

This presentation may contain forward looking statements. These statements concern or may affect future matters, such as the Company’s economic results, business plans and strategies, and are based upon the current expectations of the directors. They are subject to a number of risks and uncertainties that might cause actual results and events to differ materially from the expectations expressed in or implied by such forward looking statements. Factors that could cause or contribute to differences in current expectations include, but are not limited to, regulatory developments, competitive conditions, technological developments and general economic conditions. The Company assumes no responsibility to update any of the forward looking statements contained in this Presentation.

The information should not be interpreted as advice to customers on the purchase or sale of specific financial instruments. Wapic Insurance Plc bears no responsibility in any instance for loss which may result from reliance on the Information.

Wapic Insurance Plc hold copyright to the Information, unless expressly indicated otherwise or this is self-evident from its nature. Written permission from Wapic Insurance Plc is required to republish the information on Wapic Insurance or to distribute or copy such information. This shall apply regardless of the purpose for which it is to be republished, copied or distributed. Wapic Insurance Plc’s customers may, however, retain the Information for their private use.

Transactions with financial instruments by their very nature involve high risk. Historical price changes are not necessarily an indication of future price trends. Investors are encouraged to acquire general information from Wapic Insurance Plc or other expert advisors concerning securities trading, investment issues, taxation etc in connection with securities transactions.

The Information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by the Company. Any person at any time acquiring the securities must do so only on the Basis of such person’s own judgment as to the merits of the suitability of the securities for its purposes and only on such information as is contained in public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained herein. The information is not tailored for any particular investor and does not constitute individual investment advice.

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Agenda

• Macroeconomics Review

• Insurance Industry Review

• Wapic Transformation Plan

• FY 2013 Financial Performance

• HY 2014 Financial Performance

• Review of Subsidiary Companies

• Outlook for Q3 – Q4 2014

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Macroeconomic Review (2013 to date)

- Growth in the GDP of the Nigerian economy continues to maintain pace at around the 7%p.a. level.

- The Monetary policy remains contractionary

- Raised levels of CRR for both public and private sector deposits

- Interest rates (MPR) are stable at 12%

- Headline inflation is contained at single digit levels at 8%

- Financial markets remain bullish; NSE ASI grew by 47%

- FPI trending sideways given US QE tapering

- Nigeria’s S&P rating remains at BB- for the second consecutive year

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Insurance Industry Overview (2013 to date)

- Nigerian Insurance Industry structure:

- Contribution to overall Nigerian GDP remains low at 1%

- Total of 57 Direct insurance companies (2 Reinsurers)

- 85% of the total market GWP is generated from the corporate segment

- Retail growth rates stronger than Corporate

- Non-life insurance represents 75% of the total market GWP

- Within the Non-life insurance segment

- Motor insurance continues to be a major product category (20% of total GWP)

- The Oil & Gas industry continues to be a dominant purchaser of insurance (16% of total GWP)

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Insurance Industry Overview (2013 to date)

- 2013 & HY 2014 characterized by :

- Enforcement of premium collection through introduction of No Premium

No Cover guideline - Industry wide adoption of IFRS for FY 2012

- Introduction of regulations to promote new customer segments (Takaful

and Micro-insurance)

- Reinforcement of regulatory limits on commissions and premium rebates - M&A activity from both domestic and international players

- Competitive pressures on pricing of commercial risks

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Above & Beyond.

About Wapic

Parent Company • Wapic Insurance Plc is licensed by the National Insurance Commission (NAICOM) to write

general insurance business. The Company writes life insurance business through its wholly owned subsidiary Wapic Life Assurance Limited

Presence • Nigeria and Ghana

Number of Employees

• 194 Professional Staff

Branches • 6 Regional Offices (Abuja, Benin, Enugu, Ibadan, Kano, Port Harcourt)

Total Equity • 13.4 billion Ordinary Shares of 50 kobo each in issue

Listings • Nigerian Stock Exchange

Actuaries • HR Nigeria Limited • Alexander Forbes Consulting Actuaries Nigeria Limited

Re-insurers

• African Reinsurance Corporation • Continental Reinsurance Plc • Munich Reinsurance Company Limited • Nigerian Reinsurance Corporation • Ghana Reinsurance Company Limited • Waica Reinsurance Corporation

Auditors • KPMG

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Above & Beyond.

Evolution Since 1958 …

Established Wapic

Insurance Ghana Limited

to transact general

business

The Company was acquired by

the defunct Intercontinental

Bank Plc

Separated the Life business and

transferred the related assets

and liabilities to Wapic Life Assurance

Limited

Became a Public Limited Liability

Company and was listed on the Nigerian

Stock Exchange

Access Bank divested through

a share distribution

scheme to comply with CBN

directive on banking reforms

Incorporated as a private limited

liability Company under the name of

West Africa Provincial Insurance

Company Limited

Became a subsidiary of Access Bank through Access

Bank’s acquisition of Intercontinental

Bank Plc

2011 1958 1997

2013 1990 2009

2007

Secured a Life business license from NAICOM and became a

Composite Insurance business

2000

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Our Board of Directors

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• Chairman, Board of Directors • LLB, BL, FCIB • Former Group MD & CEO, Access Bank • 1st Vice President, Nigerian Stock Exchange • 25 years of banking experience

• Independent Non-Executive Director • Chairman Board Audit & Compliance Committee • BSc, FCA, ACTI, Certified Forensic Accountant • Senior Partner, Abax-OOSA Professionals

• Non-Executive Director • BA, MA • Chairman & CEO, Matad Group • Over 19 years in Financial Management

• Non-Executive Director • BSc, ACA • MD/CEO, Enterprise Value Matrix • Ex. Deloitte • Over 20years experience in Banking

• Non-Executive Director • Chairman Board Investment Committee • CEO, United Alliance Company of Nigeria • BSc, MSc, MBA • Ex ADB • 19 years as Investment Professional

• Independent Non-Executive Director • LLB, LLM, BL, ML • Partner, McPherson Legal Practitioners • Former Chairperson, PHB Healthcare Ltd • Over 20 years in the practice of Law and Insurance

Aigboje Aig-Imoukhuede

Bababode Osunkoya

Adamu Atta

Barnabas Olise

Chizoba Ofueze

Ifeyinwa Osime

Above & Beyond.

Our Executive Directors

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• MD & CEO • BA, FIA London, IOD SA, Wharton AMP • Former MD, Hollard Life & Investment • Over 20 years as Insurance Professional

• ED, Institutional Clients • BSc, MSc, MBA • Ex Ecobank, Access Bank • Over 23 years Banking experience

• ED, Technical Operations • BSc. ACII (UK) • Over 20 years experience in Banking and

Insurance • Former GM Custodian & Allied

• MD, Wapic Life Assurance Ltd • SMP LBS, FCII, FIIN • Former MD/CEO, Capital Express Assurance • Former GM/CEO, ADIC Life • Over 26 years as an Insurance Professional

• ED, Commercial & Government Clients • B.Ed, MBA • Ex Ecobank & Access Bank • Over 23 years Banking experience

Bode Ojeniyi Ashish Desai

Femi Obaleke Folusho Alliyu

Niyi Onifade

Above & Beyond.

Our Management Team

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• Chief Risk Officer • BSc, MSc, MBA, ACIIN, MIRM • 22 years as insurance risk manager, • Ex. Mobil, Ex REAN, Ex Access Bank

• Company Secretary/Legal Adviser • BL, LLB, LLM • Over 15 years experience in Litigation and

Corporate Law • Ex. Access Bank

• Chief Financial Officer • BSc. ACA, ACTI • Over 15 years experience spanning

Auditing, Management Consulting , Advisory and Financial Control

• Ex. KPMG

• Chief Internal Auditor • ACA, MBA, BSc. • Over 18 years experience in Auditing and

Consulting • Ex. A.W. Deloitte, Ex. Ecobank, Ex Access

Bank

• Head, Enterprise Business Support

• BSc, MBA • Over 25 years experience

principally in Banking • Ex. Unilever, Ex. Access Bank

• Head, Compliance & Internal Control

• BSc. • Over 12 years experience

principally in Banking • Ex. Citi, Ex. Access Bank

Innocent Osagiede Peter Ehimhen Gboyega Oloyede

Sunny Ogbemudia Mary Agah Muyiwa Oke

Above & Beyond.

Overview of FY 2013

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Strengthened Board of Directors with proven professionals

Reconstituted Board Committees (5) in line with NAICOM Code of Corporate

Governance

Cleaned-out backlog of accounting issues and enhanced capacity to fully

comply with IFRS

Addressed all compliance and regulatory requirements prescribed by

NAICOM, SEC, NSE and other regulators

Assembled best in class human talent composed of local and foreign

professionals

Re-aligned compensation standards with leading financial services players.

Graduated 50 2nd Upper entry level graduates from the Wapic Insurance

School of Excellence

Grew shareholders’ funds from N7.6B in 2012 to N14.2B in 2013 (86%) to

emerge as Top 4 in the industry

Solvency Ratio is rated as Top 2 by Agusto

Top 4 in Total Assets of N22B

Largest pool of shareholders in the industry (850,000)

Successfully acquired Intercontinental Properties Limited and raised

additional capital through Rights Issue

Developed transformative 5-year growth strategy

Clear path to become a leading (top 2) full service West Africa Insurance

Company by 2019

Strong Corporate Governance Standards

1

Highly Skilled Human Capital

2

3

Repositioning for Leadership

4

Balance Sheet and Financial Capital Strength

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The Nigerian Insurance Opportunity

Risk awareness and insurance in Nigeria is massively underexploited - to the detriment of Nigerians and the Nigerian economy. • Only a small fraction of businesses

and individuals are adequately insured

• Government must see insurance as necessary for sustainable economic development - because it provides the confidence to plan ahead and invest.

• If insurance achieves the same levels of penetration as Banking and Pensions, the industry will grow fifteen-fold in terms of customers insured.

Wapic will dramatically open up the addressable market - for the benefit of all its stakeholders • Wapic will seize the opportunity to

shape, dominate and stand for the new face of Nigerian insurance

• Nigeria will be the world’s 3rd most populous nation within 50 years.

• That’s a lot of policies!

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• Straight through processing

• Central processing

Embracing regulatory compliance to place

customer security and protection at the centre of

our business.

Strong capacity to meet regulatory changes without

stifling our business strategy.

Winning investor trust by professionally communicating value creation for stakeholders

Wapic’s High Level Game Plan

Leverage Chairman’s experience, network and performance track record

Flat and centralized organizational structure to maintain focus and strengthen the business

Utilizing ex-bankers to build a high performing sales force

Improving IT & Channels Technology to manage customer demands and

productivity

Transform service delivery to transform our end to end

customer experience through:

Adherence to international best practice in terms of

solvency.

Long term play in the Retail Market

Bancassurance and Non-traditional routes to market (e.g. Co-ops, Motor dealers and others)

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Highly accomplished BoD that closely supervising strategy, risk management, human resources and regulatory compliance

Recruiting high quality talent from non-traditional sources (e.g. banking, digital and expatriates)

Geographical focus • Nigeria (Lagos, PH, Abuja & 7

key locations) • Ghana (Accra & 3 key locations) Initial focus on compulsory insurance products and Corporate Market

Above & Beyond.

Segmented approach to growing market share

Perso

na

l*

Motor

Life

Health

Home

Education

Disability

Accident

Funds

Collectables

Property Marine

Industrial Specialized

Keyman

VS

ME

(>

2m

)

SM

E

(1m

)

Mid

(9

0k

)

La

rge

(7k

)

UH

I (5

k)

HN

I (8

0k

)

HIP

(2

20

k)

MIP

(3

.5m

)

LIP

(14

.4m

)

Su

rviv

or

(37

.6m

)

Co

rpo

rate

NON LIFE

LIFE

* Insurable adults (18-65) 17

Above & Beyond.

Wapic Goals & Objectives

Wapic has lofty ambitions • To be a top 2 player in the Nigerian insurance market by 2019. How will Wapic achieve its goal? • By transforming the experience of

the Nigerian insured public

• By creating the culture of high performance

• By achieving leadership in operational standards

• By setting the high water mark in financial results and shareholder value

What are some of the key enablers? • Financial strength and

capitalization

• Recruiting agile and committed professionals with integrity

• Building a customer-centric insurance model

• Implementing efficient and effective systems and processes

• Developing a strong brand and

earning the trust of stakeholders

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Purpose To innovate, illuminate, demystify and dominate the insurance market – creating customer demand and building respect for a profession which affords protection and progression to Nigerians and Nigeria.

Promise We combine expertise, efficiency and empathy, so our customers can look ahead with confidence and optimism - to take advantage of today’s and tomorrow’s opportunities.

Positioning A comprehensive range of customer focused insurance services – building from a corporate base to become a dominant retail force. “Wapic is insurance”

Personality A - Accessible S - Seasoned P - Professional I - Innovative R - Responsive E - Enlightened

Wapic’s Brand Story

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A bold and iconic brand mark

Expertise

Efficiency

High vantage

point

Empathy

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A mark of confidence Wapic enables customers to look ahead with confidence and optimism, to take advantage of today’s and tomorrow’s opportunities. The Wapic Brand Mark is a peak and a ‘high vantage point’ – A position from which our stakeholders can see things well an d take strategic decisions.

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Key performance highlights 2013

Statement of Comprehensive Income

1

Statement of Financial Position

2

FY 2013 FY 2012 Growth/(Loss)

N'000 N'000 %

Gross Premiums written 3,760,515 4,178,285 -10%

Net Underwriting Income 2,843,023 3,640,120 -22%

Total Underwriting Expenses 2,948,733 2,204,924 34%

Underwriting Profit (105,710) 1,435,195 -107%

Net Inv. & Other Income 2,280,699 1,348,853 69%

Expenses & Provisions 2,804,118 2,231,663 26%

Loss after Tax (208,127) 383,032 -154%

FY 2013 FY 2012 Growth/(Loss)

N'000 N'000 %

Financial Assets 7,606,904 5,043,368 51%

Reinsurance Assets 727,612 474,394 53%

Total Assets 22,304,046 12,678,755 76%

Total Liabilities 8,124,519 5,055,278 61%

Shareholders' funds 14,179,527 7,623,477 86%

• The decline in GWP was as a result of strict

compliance with NPNC and commission limits in the Insurance Act

• As a result of our deliberate focus to settle

legacy claims and increase the level of reinsurance (in line with our risk appetite) affected our Net Underwriting Income.

• The 2013 Underwriting loss is the direct

result of lower GWP and settlement of legacy claims.

• The growth in total assets by over 70%

implies a greater capacity to accept larger risks. This is commensurate with the higher underwriting expenses incurred.

• The increase in the value of our total assets

directly impacted our investment and other income positively

• An increase in staff count and a revised

(more competitive) compensation structure increased our Expense and Provisions

• Expected recoveries from Reinsurers on the past paid claims grew Reinsurance assets

• Total assets increased by 76% majorly due

to the IPL acquisition and Rights Issue in 2013.

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Product Line Analysis (1/2)

• Oil and Gas business was the major contributor to revenue in 2013. Oil & Gas comprises of multiple product categories and is a standard classification within the Nigerian insurance industry

• Our strengthened balance sheet as well as our increased reinsurance capacity allowed us to participate in larger risks within the Oil & Gas industry

Motor, 30%

Fire, 7%

Gen Accident, 15%

Marine, 5%

Aviation, 1%

Engineering, 4%

Oil & Gas, 13%

Life, 25%

Product Mix by GWP FY 2012

Motor, 24%

Fire, 6%

Gen Accident,

13%

Marine, 5%

Aviation, 1% Engineering,

3%

Oil & Gas, 31%

Life, 17%

Product Mix by GWP FY 2013

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Product Line Analysis (2/2)

• Oil & Gas and Engineering business are typified by volatile claims. The early part of this analysis period (2011 to 2012) was characterised by unusually large claims which resulted in Wapic establishing a more optimal reinsurance arrangements in 2013

• The Underwriting profitability across all other product lines is consistent with our pricing expectations

• Wapic continues to deploy leading risk analysis to optimise its underwriting performance.

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0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Motor Fire GeneralAccident

Marine Aviation Engineering Oil & Energy Life

2011 2012 2013

Claims Ratio by Product Class

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Parent and Subsidiaries Contribution to Revenue

• Life GWP declined from being 30% of the total Nigerian business in 2012 to 22% in 2013. This was largely as a result of the effects of NPNC which led to the non-recognition of public sector receivables for life insurance premiums

• Wapic Ghana’s performance (in Naira) was adversely impacted by a deterioration in the Cedi against the US Dollar.

Wapic Insurance Plc, 53%

Wapic Life Assurance Ltd,

25%

Wapic Insurance (Ghana) Ltd, 21%

Company Contribution (GWP) FY 2012

Wapic Insurance Plc, 63%

Wapic Life Assurance Ltd,

17%

Wapic Insurance (Ghana) Ltd, 19%

Company Contribution (GWP) FY 2013

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Key performance highlights – Half Year 2014

Statement of Comprehensive Income

1

Statement of Financial Position

2 FYE 2014 E FYE 2013 Growth/(Loss)

N'M N'M %

Financial Assets 8,691 7,607 14%

Reinsurance Assets 303 728 -58%

Total Assets 24,069 22,304 8%

Total Liabilities 9,970 8,125 23%

Shareholders' funds 14,359 14,180 1%

• GWP at HY 2014 is 27% higher than HY 2013.

• On an annualised basis, the 2014 GWP is expected to be 94% higher than FY2013

• The Company recorded

underwriting profit in HY 2014 due to improved production and effective risk selection

• Expenses and Provisions increased due to :

• More experience senior team

from other industries • Investment in technology • Spend on strategy

consultants for building the 5 year plan

• Reinsurance assets decreased as we received payments from reinsurers on claims paid in 2013.

• The company’s insurance

liabilities have grown in line with business volumes

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Half Year

2014 E

Half Year

2013

Full Year

2013

HY on HY

Growth/

(Decline)

FYA on FY

Growth/

(decline)

N'M N'M N'M % %

Gross Written Premium 3,639 2,867 3,761 27% 94%

Net Underwriting Income 1,775 1,765 2,843 1% 25%

Total Underwriting Expenses 996 1,435 2,949 -31% -32%

Underwriting Profit 779 330 (106) 136% 1374%

Net Inv. & Other Income 770 718 2,281 7% -33%

Expenses & Provisions 1,277 797 2,804 60% -9%

Profit/ (loss) Before Tax 234 251 (629) -7% -26%

Profit / (loss) After Tax 179 175 (208) 2% 72%

Above & Beyond.

SBU Contribution by GWP – Half Year 2014

• Institutional Clients focus on large corporates in Nigeria with annual turnovers in excess of N5billion • Commercial & Government Clients focus on clients with an annual turnover of >N500million - <N5billion. They also focus on Nigeria’s

Public Sector (PS) comprising of Federal Government, State Governments, MDAs and Government Tertiary Institutions • Individual & SME Clients focus on providing insurance and risk management services to individual and Micro SME companies across

Nigeria. • Bancassurance Clients focus on the Individual and SME customers of our bank partners

51%

20% 25%

5%

Institutional Clients Commercial &Government Clients

Individual & SMEClients

Bancassurance

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Above & Beyond.

Outlook for Q3-Q4, 2014

- Wapic Brand launch

- 60% completion of Wapic Head Office

- Selection and acquisition of core business application

- Motor & Marine product launch

- Launch SME business initiatives

- Launch Bancassurance initiatives

- Revamping branch presence in 6 locations in Nigeria

- Implement Subsidiary Governance framework

- Commence roll out of Financial Service Associate Program

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Above & Beyond.

Wapic will transform the

insurance market in Nigeria

and beyond. A new paradigm.

A unique proposition.

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Above & Beyond.

Thank you

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Wapic Insurance Plc - Nigeria’s No1 Economy and ... · Wapic Insurance Plc ... • Munich Reinsurance Company Limited ... •Over 20 years in the practice of Law and Insurance