PERFORMANCE HIGHLIGHTS BY THE GROUP OFFICER-IN-CHARGE & COO
dr. rishi sookdawoor
On behalf of the National Insurance Co. Ltd (“NIC Life”), I am honoured to present our business and financial performances for the year ended 30 June 2022. The financial period 2021-2022 has unquestionably been an extraordinary year, one marking an important milestone in the history of NIC Life and one, found to be more challenging than ever, amidst the continually evolving governance landscape and the creeping post pandemic effects on our clients, people, communities and on the financial markets.
“These continually evolving landscape and business dynamics are stretching our perspectives, with on one hand, a strong need to withstand economic and market pressures arising from the post pandemic effects and geopolitical tensions, and on the other hand, a strong need to dynamically adjust our business strategies to sustain growth and meet stakeholders’ expectations.”
FINANCIAL PERFORMANCE AND OPERATIONAL INSIGHTS
In this incredibly dynamic environment, our people stood together with strong commitment, loyalty and stayed true to our strategy of putting our clients first. Although we still have a lot of projects to embrace in our innovation and transformation journey, and to further render our clients’ service experience more pleasant across channels, I am glad to report that, with the strategic and tactical measures put in place, we delivered some exceptional results for the benefit of our stakeholders despite tight market and economic conditions.
The key realisations of the Company are as follows:
TOTAL REVENUE MUR 1.709 bn
Total revenue grew to reach 1.709 billion (MUR 1.7 billion in 2021)
PROFIT FOR THE YEAR MUR 194.2 m
Profit for the year registered an important growth of 36.4% over last year to reach MUR 194.2 million
INFORCE POLICIES 135,000 policies
The portfolio of inforce policies grew by over 2,000 policies during the year to reach nearly 135,000 policies
GROSS PREMIUM MUR 1.56 bn
Gross premium for the year stood at MUR 1.56 billion (MUR 1.62 billion in 2021)
INVESTMENT & OTHER INCOME Growth of 55%
Investment income registered a growth of 55% compared to last year
OPERATING EXPENSES Reduction by 24%
Operating expenses were reduced further by nearly 24%, thus culminating into an expense ratio of 11% compared to 14% in the previous financial period. This represents a further savings of above MUR 50m in operating expenses for the year thanks to the cost optimisation strategies and the collective effort of each and every member and business units of NIC
CLAIMS & BENEFITS PAID MUR 1.29 bn
Claims and benefits paid to policyholders stood at nearly MUR 1.29 billion, an increase of nearly 6% over last year
FINANCIAL POSITION
NIC Life further consolidated and strengthened its balance sheet
TOTAL ASSETS Grew to MUR 10.34 bn
Total assets grew by MUR 213 million to reach MUR 10.34 billion
SHAREHOLDER’S EQUITY MUR 1.96 bn
A considerable growth in shareholder’s equity from MUR 1.76bn (2021) to MUR 1.96 bn (2022)
SOLVENCY Growth of 22%
A growth in the solvency position of the Company with a 22% increase in the solvency margin and Minimum Capital Requirements (MCR) ratio reaching 2.18 as at 30 June 2022
With the growth in portfolio, the long term insurance fund increased from MUR 7.89 billion (2021) to MUR 7.93 billion (2022)
LIFE AND PENSIONS
Our life and pensions business experienced steady growth despite the visible surge in COVID-19 related death claims. This high incidence of death due to the pandemic has led to some prompt adjustments in our risk assessment and underwriting approach with the introduction of revised proposal forms and medical examination questionnaires in a bid to better understand new business profiles with higher co-morbidity factors and their vaccination status. With the concurring advent of uncertainties resulting from the pandemic, we have also witnessed an increased awareness in clients and a tendency, particularly by those who have had their policies on a paid-up (dormant) status, for a re-activation of their life insurance policies, a responsible move towards protection of their family welfare and income in trying times. This advent had also led prospective new clients to adequately insure themselves and their dear ones lately. Growth in the customer base was also driven by the pensions business as a result of the introduction of tax relief incentives on this type of long-term policy as it enables people to independently save for their retirement whilst alongside benefiting from tax incentives As part of our eco-attitude strategy, e-policies and electronic communication are being favoured. The financial markets both locally and globally were impacted with the repercussions of the pandemic, the Russia-Ukraine war, and the broader geopolitical tensions. As the local economy sets to recover from these intensive setbacks especially with the welcoming government policies to boost the economic sectors, NIC is alongside gearing its strategies and their execution to embrace the next wave of development with the launch of a series of innovative products tuned to the emerging needs of the population with an ultimate goal of enhancing the lives and lifestyles of local citizens across age and socio-economic groups.
TECHNOLOGY AND OPERATIONAL EXCELLENCE
The year marked an important turning point in our technological strategy with the start of a comprehensive overhauling of our ICT infrastructure and the implementation of our new enterprise and scalable Data Centre to support our future business expansion and automation strategies whilst laying stronger foundation for business continuity. This critical project is fully underway and the transition is set to take place in beginning 2023. They pave the way for strategic projects and further developments such as implementation of the IFRS 17 accounting standard, embracement of web-enabled applications across various lines of business, including an online quotation system and portal for our clients, enhancement of legacy systems and digital transformation within an InsureTech era altogether. We continued to gather client feedback from our front desk operations and multi-channels, pursued the assessment and adjustment of our internal processes and operational approaches in a bid to improve both their efficiency and effectiveness in better serving our clients as well as enhancing their service experience.
LOANS
Our loan business has taken a promising leap with a consistent focus on mortgage loans and the introduction of corporate loans for the SMEs and other commercial enterprises. The Car Loan scheme, positioned as an alternative to leasing options with retained ownership by the client, has been another important landmark of this line of business with a multifold increase in new disbursements since its introduction in the last 2 years. Finally, the innovative strategies put in place in a bid to grow the Policy loan portfolio (loans granted against the accumulated value of the life insurance policies) have led to an increase of over 55% in the count of disbursement Accounts.
DISTRIBUTION CHANNELS
We continue to expand our distribution channels within the bancassurance sector to leverage on our group credit life insurance underwriting capability at very competitive margins and set forth the plans for a chain of exclusive and accredited agencies in key and strategically earmarked locations as well as pursuing our quest for enhancing our web channels.
INVESTMENT IN HUMAN CAPITAL
With the completion of an important phase of the Restructuring Plan, we have embarked in a steady re-shaping of our manpower structure and talent pool with the design of a roadmap to enhance their technical capabilities. In the next financial period, additional focus on professional and leadership development and technical competencies will be on the implementation agenda through our NIC Academy which will regroup both local and international bodies and expertise to fulfill our learning and development goals.
In this endeavour, our salesforce has also undergone comprehensive programmes to better understand the dynamics of the insurance industry and garner the skills and techniques required in the ever evolving market with FinTech products and services. Today, NIC Life proudly counts over 30 Master Financial Advisors and over 60 Associate Financial Advisors from LIMRA Global, a first on the African continent. In the endeavour to expand its operational capability, NIC Life has also embarked in a prudent but thorough review of its manpower requirements, offered employment to industry professionals and a platform for youngsters to gain first hand exposure and experience (across the group) for their career growth while supporting the organisation in its mission.
The Way Forward
With the completion of foundation works on our refreshed corporate brand positioning and a complete revamping of our product suite, we also set to embrace the forthcoming period on a new footing, with the introduction of a wave of innovative products customised to our clients’ needs to Insure, Protect and Empower them throughout their lives. 2022-2023 will come with its own set of specificities and challenges but our confidence is as strong as it has ever been to steer our strategy forward and help our clients progress in their businesses and lives with peace of mind. Our strategy is to continue to be forward-looking, be profoundly human and fair in our approach and produce higher, more consistent returns by growing and strengthening our existing lines of business, diversifying our business ventures and operating more efficiently with sustainable approaches. These entrenched practices, core to our organisational DNA, help us steer serenely through the present and future challenges such as the presentation of financial statements under IFRS 17 standard, changing legislation whether regarding AML-CFT requirements or new obligations conferred onto us in respect of evolving employee and workforce rights.
As we march into 2022-2023 financial year, I want to thank all our team members of NIC Life. Their hard work, dedication, resilience, innovative and forward-looking spirit continue to drive our success. Our employees and salesforce members are central to us living up to our promise of Serving You, Serving the Nation by translating our brand promise and mission statement in concrete actions on the ground, and with underlying commitment, expertise, care and through our strong collaborative, ethical and organisational citizenship culture. Building on the commendable progress we have made so far, I look forward to our future accomplishments in the years ahead as together, we continue to unlock the power of our potential, allow new initiatives to scale up and continue to drive better value for our policyholders and other key stakeholders.
On this note, I graciously thank our Shareholder, the Hon. Minister of Financial Services and Good Governance, the Permanent Secretary of the Parent Ministry, the Board of Directors, the Group Chairman, the NIC workforce, our channel partners and our valued clients for their unflinching support and trust in NIC.
Dr. Rishi O. Sookdawoor
Group Officer-In-Charge & COO