UNITRUST ANNUAL REPORT 2017 final finalsahamunitrust.com/UNITRUSTANNUALREPORT2017final.pdf · Bonus...

&

Saham Unitrust Insurance Nigeria Limited

Consolidated and Separate Financial Statements - 31 December 2017

and Subsidiary Company

CONTENTS

PAGE

Corporate Information............................................................................................................................1

Notice of the Meeting.............................................................................................................................3

Directors’ Report.....................................................................................................................................4

Statement of Directors’ Responsibilities.................................................................................................9

Corporate Governance Report..............................................................................................................10

Management Commentary and Analysis..............................................................................................16

Report of the Risk Management and Audit Committee........................................................................18

Independent Auditor’s Report...............................................................................................................19

Statements of Accounting Policies.......................................................................................................24

Critical Accounting Estimates and Judgements....................................................................................51

Consolidated and Separate Statements of Profit or Loss and Other Comprehensive Income..............56

Consolidated and Separate Statements of Financial Position...............................................................57

Consolidated and Separate Statements of Changes In Equity..............................................................58

Consolidated and Separate Statements of Cash Flows.........................................................................60

Risk Management Framework..............................................................................................................61

Notes to the Consolidated and Separate Financial Statements.............................................................62

Other Financial Information...............................................................................................................135

PROXY FORM

I,…….....……………………………...………….......………………………..

of…………….......…………….....……………………………………………

being a member of SAHAM UNITRUST INSURANCE NIGERIA LTD hereby

appoint..……..............................................................................................…of

.……………………………………..........................................................….or

failing him……....…..……………………….......……….....……………….of

……………………….......……….....……………………as my proxy to vote for me and act on my behalf at the Annual General Meeting of the Company to

thbe held on Wednesday, 4 July, 2018 and at any adjournment thereof.Signed this.......................day of................................................................2018.

..................................................SIGNATURE

Chairman Gen. T. Y. Danjuma (Rtd.) G.C.O.N.

Directors Mr. John Ijerheime - Managing DirectorMrs. Yetunde Adenuga - Executive DirectorMr. Elias Atrib - Non-Executive Director Mrs. Grace E. Danjuma - Non-Executive Director Professor J.O. Irukwu - Non-Executive DirectorMr. Christopher Chagoury - Non-Executive DirectorMr. Raymond Farhat - Non-Executive DirectorMrs. Nadia Fettah - Non-Executive DirectorMr. Raoul Moloko - Non-Executive DirectorMr. Merick Oeschger - Non-Executive DirectorMr.Adebayo Adeleke - Independent Director

Corporate Office Saham Unitrust Insurance Nigeria LimitedPlot 105B Ajose Adeogun StreetVictoria Island, LagosTelephone: 01-4617031-2, 4626850-2, 2701167-9Email:[email protected]: www.sahamunitrust.com

Auditors Deloitte & ToucheCivic Towers, Plot GA 1 Ozumba Mbadiwe Avenue, Victoria Island, Lagos, Nigeria

Company Secretary Marina Nominees LimitedAret Adams House233 Ikorodu Road, Ilupeju LagosFRC/2013/00000000001506

Bankers Access Bank PlcFirst City Monument Bank PlcGuaranty Trust Bank PlcZenith Bank PlcFirst Bank of Nigeria LimitedStandard Chartered Bank PlcStanbic IBTC BankDiamond Bank PlcUnion Bank of Nigeria PlcSkye Bank PlcUnited Bank for Africa PlcKeystone Bank LimitedSterling Bank LimitedEcobank Nigeria LimitedFidelity Bank PlcHeritage Banking Company LtdBank of BeirutByblos Bank Europe


Saham Unitrust Insurance Nigeria Limited and Subsidiary Company 1

Re-insurers African Reinsurance CorporationContinental Reinsurance PlcMunich Reinsurance Company LimitedNigeria Reinsurance CorporationWaica Reinsurance Corporation PlcTrust International & Reinsurance Company

Actuary Ernst & YoungFRC/NAS/00000000738

Estate valuer Paul Osaji & Co. Estate Surveyors & Valuers25a, Kofo Abayomi Street, Victoria Island, LagosFRC/2013/[email protected]



Notice of Meeting



SAHAM UNITRUST INSURANCE NIGERIA LTD

NOTICE IS HEREBY GIVEN that the 2018 Annual General Meeting of the Company will be held at the B thoffices of Unitrust House, Plot 105 , Ajose Adeogun Street, Victoria Island, Lagos on Wednesday, 4 July, 2018 at

1.00 p.m. for the following purposes:-

ORDINARY BUSINESS:st1. To lay before the meeting the financial statements for the year ended 31 December, 2017 and the reports of

the Directors and Auditors thereon.2. To declare a dividend.3. To re-elect Directors.

st4. To approve the remuneration of the Directors for the year ended 31 December, 2017.5. To authorise the Directors to fix the remuneration of the Auditors.

SPECIAL BUSINESS:6. To consider and if, thought fit, pass the following resolutions which will be proposed as an Ordinary

Resolutions:

(a) Rescission of Ordinary Resolution:th

“That the ordinary resolution passed at the Extraordinary General Meeting held on 6 December, 2017 authorising that the sum of N1,100,000,000 from the retained earnings be capitalised and that the Directors be and are hereby authorised and directed to: (i) apply the capitalised sum of N1,100,000,000 on behalf of the shareholders in paying up

in full 1,100,000,000 of the unissued shares of N1.00 each (ranking for all dividends thereafter declared on the issued shares of the Company); and

(ii) allot and distribute such 1,100,000,000 shares credited as fully paid up to and amongst the shareholders in the proportion of one new share of N1.00 fully paid for every three (3) shares of N1.00 each fully paid and registered in such shareholders' names at the

stclose of business on 21 September, 2017. be and is hereby rescinded”.

(b) Capitalisation of Reserves:“That the sum of N660,000,000 from the retained earnings be capitalised and that the Directors be and are hereby authorised and directed to: i. apply the capitalised sum of N660,000,000 on behalf of the shareholders in paying up in

full 660,000,000 of the unissued shares of N1.00 each (ranking for all dividends thereafter declared on the issued shares of the Company); and

ii. allot and distribute such 660,000,000 shares credited as fully paid up to and amongst the shareholders in the proportion of one new share of N1.00 fully paid for every five (5) shares of N1.00 each fully paid and registered in such shareholders' names at the close of

thbusiness on 28 March, 2018.

BY ORDER OF THE BOARD

MARINA NOMINEES LIMITEDSecretaries

LAGOS

nd22 May, 2018

NOTE:PROXYA member of the Company entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend and vote instead of him and such proxy need not be a member. A form of proxy is attached and to be valid, the form must be stamped by the Commissioner for Stamp Duties.

Directors’ Report

Saham Unitrust Insurance Nigeria Limited and Subsidiary Company


The directors are pleased to present their report on the affairs of Saham Unitrust Insurance Nigeria Limited (“the Company”) and subsidiary company (“the Group”), together with the audited financial statements and the auditor’s report for the year ended 31 December 2017.

Legal form and principal activityThe Company was incorporated on 9 November 1981 as a private limited liability company “Union Nigeria Insurance Company Limited”. The Company’s name was changed to Unitrust Insurance Company Limited on 3 May 1983 and obtained a general insurance license from the National Insurance Commission on 13 August 1986. In January 1999, the Company also obtained a license to carry out life insurance business. Following the recapitalisation exercise in February 2007, the Company focused on its general insurance business and discontinued its life. In 2016, the Company changed its name to Saham Unitrust Insurance Nigeria Limited subsequent to the approval of the board and all regulatory agencies.

The Company’s principal activity continues to be provision of risk underwriting and related financial services to its customers. Such services include provision of general insurance services to both corporate and individual customers.

The Company has one wholly owned subsidiary, Unitrust Global Assets Management Limited. The subsidiary was incorporated as a private limited liability company on 9 January 2001 and its principal activity involves provision of property management services to both individual and corporate clients.

The financial results of the subsidiary have been consolidated in these financial statements.

On 4 November 2014, Saham Finances SA, the insurance arm of the Saham Group, through its wholly owned Mauritian operating company (Colina Holdings Limited) acquired a 40% stake in Saham Unitrust Insurance Nigeria Limited.

Operating resultsThe following is a summary of the Group’s and Company’s operating results for the year ended 31 December 2017:

Group Company2017 2016 2017 2016

? ’000 ? ’000 ? ’000 ? ’000

Gross earnings

3,694,255

3,634,385

3,692,075 3,632,421

Gross premium written

2,486,736

1,929,287

2,486,736 1,929,287

Profit before taxation

818,041

1,309,555

814,543 1,315,299

Taxation

(390,360)

(528,617)

(389,101) (528,394)

Profit after taxation

427,681

780,939

425,442 786,905

Total comprehensive income for the year

647,201

1,162,609

644,962 1,168,575

Transfer to contingency reserve

85,088

157,380

85,088 157,380

Transfer to retained earnings

342,593

623,558

340,354 629,525

427,681

780,938

425,442 786,905

Earnings per share -

Basic and Diluted (kobo)

13

24

13 24



Directors’ Report Cont’d

Proposed dividendThe Board of Directors recommended a dividend of 6kobo per share, resulting to 198million for the year ended 31 December 2017 (2016: N396million). Withholding tax will be deducted at the time of payment.

Bonus issueThe Board of Directors recommended a bonus share of (1) one for every (5) five shares held for the year ended 31 December 2017 (2016: Nil)

Directors and their interestsThe directors of the Company who held office during the year together with their direct and indirect interest in the share capital of the Company as recorded in the register of directors’ shareholding and/or as notified by the directors for the purposes of sections 275 and 276 of the Companies and Allied Matters Act Cap C20, Laws of the Federation of Nigeria 2004 were as follows:

N

(Number of ordinary shares held)

2017 2017 2016 2016

Direct

Indirect

Direct Indirect

Gen. T. Y. Danjuma (Rtd.) G.C.O.N.

-

Chairman

-

649,361,341

-

649,361,341Mr. J.O. Ijerheime

-

Managing Director

-

-

-

-

Mrs.

Yetunde Adenuga

-

Executive Director (Technical)

-

-

-

-

Mr. Elias j. Atrib

-

Non Executive

-

534,039,695

-

534,039,695Mrs. Grace E. Danjuma

-

Non Executive

92,966,040

-

92,966,040

-Professor J.O. Irukwu

-

Non Executive

9,965,052

-

9,965,052

-Mr Adebayo A.Adeleke

-

Non Executive

-

-

-

-Mr. Christopher Chagoury

-

Non Executive

-

278,967,956

-

278,967,956Mr. Raymond Farhat (French)

-

Non Executive

-

1,320,000,000

-

1,320,000,000Mrs. Nadia Fettah (Moroccan)

-

Non Executive

-

-

-

-Mr. Raoul Moloko (Ivorian)

-

Non Executive

-

-

-

-Mr. M. Oeschger (South African) - Non Executive - - - -

Exit of DirectorsNo director exited from the board in the year 2017

* Mrs. N. Fettah, Messrs. R. Farhat, R. Moloko, M. Oeschger represent the interest of Colina Holdings Limited, which owns 1,320,000,000 Ordinary Shares of N1 each in the issued share capital of the Company.

Appointment of directorsNo director was appointed into the board in the year 2017

Significant shareholdingThe Company’s authorised share capital is N5 billion divided into 5 billion ordinary shares of N1 each, of which 3.3 billion ordinary shares are issued and fully paid. According to the Register of Members, no shareholder other than the under-mentioned held more than 5% of the issued share capital of the Company as at 31 December 2017:




Directors’ interests in contractsIn accordance with Section 277 of the Companies and Allied Matters Act of Nigeria, none of the directors has notified the Company of any declarable interest in contracts or proposed contracts during the year.

Property and equipmentInformation relating to changes in property and equipment is given in note 37 to the financial statements. In the directors’ opinion, the market value of the Group’s properties is not less than the carrying value shown in the financial statements.

Donations and charitable giftsThe Company identifies with the aspirations of the community as well as the environment within which it operates and made charitable donations to the under-listed organizations N650,000 (2016: 767,138) during the year as follows:

N

2017 2016

No. of shares held % Holding

No. of shares held % Holding

Colina Holdings 1,320,000,000 40 1,320,000,000 40

T.Y. Holding s (Nig) Limited 649,361,341 20 649,361,341 20

Atmat Investments Limited 445,107,570 13 445,107,570 13

Chagoury Ronald 278,967,956 8 278,967,956 8

Unitrust Investments Limited 278,967,956 8 278,967,956 8

Analysis of shareholding The analysis of the distribution of the shares of the Company is as follows:

31-Dec-2017

Share range No of

Shareholders % of

Shareholders No. of Holding %

Holding

1,000,000 – – 100,000,000 7 58 327,595,177 10 100,000,001 – 200,000,000 - - - - 200,000,001 – 400,000,000 2 17 557,935,912 17 Above 400,000,000 3 25 2,414,468,911 73

Total 12 100 3,300,000,000 100

31-Dec-2016

Share range No of

Shareholders % of

Shareholders No. of Holding %

Holding

1,000,000 – 100,000,000 7 58 327,595,177 10 100,000,001 – 200,000,000 - - - - 200,000,001 – 400,000,000 2 17 557,935,912 17 Above 400,000,000 3 25 2,414,468,911 73

Total 12 100 3,300,000,000 100

Organisations: 2017 2016 ? ?

The Nigerian Council of Registered Insurance Brokers 500,000 - 150,000 -

- 150,000 Chartered Insurance Institute of Nigeria Professional Insurers Ladies Association General Secretariat of Lomé, Togo & the Nigerian National Bureau - 617,138

650,000 767,138




Human Resources

Employment of disabled personsThe Group operates a non-discriminatory policy in the consideration of applications for employment, including those received from disabled persons. The Group’s policy is that the most qualified and experienced persons are recruited for appropriate job levels irrespective of the applicant’s state of origin, ethnicity, religion or physical condition. In the event of any employee becoming disabled in the course of employment, the Group is in a position to arrange appropriate training to ensure the continuous employment of such a person without subjecting him/her to any disadvantage in his/her career development. As at 31 December 2017, the Group had one physically disabled person in its employment (2016: 1).

Health, safety and welfare of employeesThe Group maintains business premises designed with a view to guaranteeing the safety and healthy living conditions of its employees and customers alike. Health, safety and fire drills are regularly organized to keep employees alert at all times. Employees are adequately insured against occupational hazards. In addition, the Group provides medical facilities to its employees and their immediate families at its expense.

Diversity in employmentThe number and percentage of men and women employed during the financial year ended 31 December 2017 and the comparative year vis-à-vis the total work force is as follows:

2017 Number %

Male Female Total Male FemaleEmployees 52 42 94 55% 45%

2016

Number

%

Male

Female

Total

Male Female

Employees

46

40

86

53% 47%

Gender analysis of top management is as follows:

2017

Number

%

Male

Female

Total

Male FemaleAssistant General Manager

2

2

4

50% 50%Senior Manager

3

-

3

100% 0%Manager

7

4

11

64% 36%Total

12

6

18

66% 34%

2016

Number %

Male Female Total Male FemaleAssistant General Manager 1 2 3 33% 67%Senior Manager 2 - 2 100% 0%Manager 7 3 10 70% 30%Total 10 5 15 66% 34%


Employee involvement and trainingThe Group encourages participation of employees in arriving at decisions in respect of matters affecting their well being. Towards this end, the Group provides opportunities for employees to deliberate on issues affecting the Group and employees’ interests, with a view to making inputs to decisions thereon. The Group places a high premium on the development of its manpower. Consequently, the Group sponsored its employees for various training courses in the year.

Acquisition of own sharesThe Company did not purchase any of its own shares during the year.

Events after the end of the reporting periodThere were no events after the end of the reporting period which could have had material effect on the financial position of the Company as at 31 December 2017 and the profit for the year ended which have not been recognized and/or disclosed.

AuditorsDeloitte & Touche has indicated their willingness to continue in office as auditors in accordance with Section 357 (2) of the Companies and Allied Matters Act of Nigeria.

BY ORDER OF THE BOARD

O. A. ADENLE

FRC/2013/NBA/00000003277MARINA NOMINEES LIMITEDFRC/2013/NBA/00000000001506Company SecretaryAret Adams House233 Ikorodu Road, Ilupeju Lagos28 March 2018



The Directors of Saham Unitrust Insurance Nigeria Limited are responsible for the preparation of the financial statements that give a true and fair view of the financial position of the Company as at 31 December 2017, and the results of its operations, cash flows and changes in equity for the year ended, in compliance with International Financial Reporting Standards (“IFRS”), and in the manner required by the Companies and Allied Matters Act of Nigeria, the Insurance Act of Nigeria, relevant guidelines and circulars issued by the National Insurance Commission (NAICOM) and Financial Reporting Council of Nigeria Act.

In preparing the financial statements, the Directors are responsible for:

• properly selecting and applying accounting policies;• presenting information, including accounting policies, in a manner that provides relevant, reliable,

comparable and understandable information; • providing additional disclosures when compliance with the specific requirements in IFRSs are

insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company’s financial position and financial performance; and

• making an assessment of the Company’s ability to continue as a going concern.

The Directors are responsible for:

• designing, implementing and maintaining an effective and sound system of internal controls throughout the Company;

• maintaining adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company, and which enable them to ensure that the financial statements of the Company comply with IFRS;

• maintaining statutory accounting records in compliance with the legislation of Nigeria and IFRS; • taking such steps as are reasonably available to them to safeguard the assets of the Company; and • preventing and detecting fraud and other irregularities.

Going Concern:The Directors have made an assessment of the Company’s ability to continue as a going concern and have no reason to believe the Company will not remain a going concern in the year ahead.

The financial statements of the Company for the year ended 31 December 2017 were approved by the board of directors on 28 March 2018.

By order of the Board

__________________________________ _________________________Gen. T. Y. Danjuma (Rtd.) G.C.O.N. John IjerheimeFRC/2013/IODN/00000003130 FRC/2016/CIIN/0000001429128 March 2018 28 March 2018

STATEMENT OF DIRECTORS' RESPONSIBILITIESin Relation to the Financial Statements



Corporate Governance Report for the year ended 31 December 2017

IntroductionSaham Unitrust Insurance Nigeria Limited (“Saham Unitrust” or“the Company”) recognizes that the implementation of corporate governance standards and practices should have dual objectives of protecting the interest of the shareholders and other stakeholders whilst also enabling the Board and Management to direct and manage the affairs of the Company. The Company is therefore committed to implementing the best practice standards of corporate governance.

Saham Unitrust is mindful of its obligations under the relevant codes of corporate governance such as the National Insurance Commission (NAICOM) Code of Corporate Governance for the Insurance Industry in Nigeria. This, and the Company's Board Charter collectively provide the basis for promoting sound corporate governance in the Company. Our core values of excellence, leadership, innovation, professionalism, empowered employees and passion for customers are the bedrock upon which we continue to build our corporate behaviour.

In order to ensure consistency in its practice of good corporate governance, the Company continuously reviews its practice to align with the various applicable Codes of Corporate Governance with particular reference to compliance, disclosures and structure.

Governance structureThe governance of the Company resides with the Board of Directors who is accountable to shareholders for creating and delivering sustainable value through the management of the Company's business. The Board of Directors is responsible for the efficient operation of the Company and to ensure that the Company fully discharges its legal, financial and regulatory responsibilities.

The Board also reviews corporate performance, monitors the implementation of corporate strategy and sets the Company's performance objectives. The Board monitors the effectiveness of its governance practices, manages potential conflict and provides general direction to Management. These oversight functions of the Board of Directors are exercised through its various committees. In the course of the year under review, the Board had three (3) Committees to ensure the proper management and direction of the Company via interactive dialogue on a regular basis.

The Board membership comprises twelve (12) members, including the Chairman, eight (8) Non-Executive Directors, one (1) Independent Director and two (2) Executive Directors.

The details of the composition of the Board is as set out below:

S/N Name Designation1 Gen. T. Y. Danjuma (Rtd.) G.C.O.N. - Chairman 2 Mr. Elias Atrib - Non-Executive 3 Mrs. Grace E. Danjuma - Non-Executive 4 Professor J.O. Irukwu - Non-Executive 5 Mr. Christopher Chagoury - Non-Executive 6 Mr. Raymond Farhat - Non-Executive 7 Mrs. Nadia Fettah - Non-Executive 8 Mr. Raoul D. Moloko - Non-Executive 9 Mr. M. Oeschger - Non-Executive 10 Mr. Adebayo Adeleke - Independent Director11 Mrs. Yetunde Adenuga - Executive Director - Technical12 Mr. J.O. Ijerheime - Managing Director/Chief Executive Officer



The effectiveness of the Board derives from the appropriate balance and mix of skills and experience of the directors, both executive and non-executive. The Company's Board is made up of seasoned professionals, who have excelled in their various professions and possess the requisite integrity, skills and experience to bring to bear independent judgment on the deliberations of the Board.

The Board is responsible for ensuring the creation and delivery of sustainable value to the Company's stakeholders through its management of the Company's business. The Board is accountable to the shareholders and is responsible for the management of the Company's relationship with its various stakeholders. The Board ensures that the activities of the Company are at all times executed within the relevant regulatory framework.

The Board meets quarterly and additional meetings are convened as and when required. Material decisions may be taken between meetings by way of written resolutions, as provided for in the Articles of Association of the Company. The directors are provided with comprehensive group information at each of the quarterly Board meetings and are also briefed on business developments between Board meetings. The Board met five (5) times during the year ended 31 December 2017.

Role and Responsibilities of the Board· Sets the overall direction of the business· Designs and maintains good internal control· Approves the Company's strategic plans· Approves the appropriation and distribution of profits· Approves top management's terms of employment· Monitors and takes decisions on major risks facing the Company· Reviews and considers matters reserved for the general Board

Role of key members of the BoardThe positions of the Chairman of the Board and the Chief Executive Officer are separate and held by different persons.

The ChairmanThe Chairman's main responsibility is to lead and manage the Board to ensure that it operates effectively and fully discharges its legal and regulatory responsibilities. The Chairman is responsible for ensuring that Directors receive accurate, timely and clear information to enable the Board take informed decisions, monitor effectively and provide advice to promote the success of the Company.

The Chairman also facilitates the contribution of non-executive directors to promote effective relationships and open communications, both inside and outside the Boardroom, between executive and non-executive directors. The Chairman strives to ensure that any disagreements on the Board are resolved amicably.

The Chief Executive OfficerThe Board has delegated the responsibility for the day-to-day management of the Company to the Chief Executive Officer (CEO), who is responsible for leading management and for making and implementing operational decisions. The CEO is responsible to the Board of Directors and ensures that the Company complies strictly with regulations and policies of both the Board and Regulatory Authorities. The CEO ensures that optimization of the Company's resources is achieved at all times and has the overall responsibility for the Company's financial performance.

Corporate Governance Report Cont’d



Company SecretaryThe Company Secretary is a point of reference and support for all directors. It is her responsibility to update the directors with all requisite information promptly and regularly. The Board may through the Company Secretary obtain information from external sources, such as consultants and other advisers, if there is a need for outside expertise.

The Company Secretary is further responsible for assisting the Chairman and Chief Executive Officer to formulate an annual Board Plan and with the administration of other strategic issues at the Board level; organizing Board meetings and ensuring that the minutes of Board meetings clearly and properly capture Board's discussions and decisions.

Nomination process for DirectorsThe Board agrees upon the criteria for the desired experience and competencies of new directors. The Board has power under the Articles of Association to appoint a director to fill a casual vacancy or as an additional director. The criteria for the desired experience and competencies of new non-executive directors are agreed upon by the Board.

The balance and mix of appropriate skills and experience of non-executive directors is taken into account when considering a proposed appointment. In reviewing the Board composition, the Board ensures a mix with representatives from different industry sectors.The shareholding of an individual in the Company is not considered a criterion for the nomination or appointment of a director. The appointment of directors is subject to the approval of NAICOM.

Board CommitteesThe Board carries out its oversight function through its standing committees each of which has a charter that clearly defines its purpose, composition, and structure, frequency of meetings, duties, tenure and reporting lines to the Board. In line with best practice, the Chairman of the Board does not sit on any of the committees. The Board's three standing committees are the Board Audit and Compliance Committee, Finance, Investment & General Purposes Committee and The Enterprise Risk Management & Governance Committee.

Through these committees, the Board is able to more effectively deal with complex and specialized issues and to fully utilize its expertise to formulate strategies for the Company. The committees make recommendations to the Board, which retains responsibility for final decision making.

All committees in the exercise of their powers as delegated conform to the regulations laid down by the Board, with well-defined terms of reference contained in the charter of each committee. The committees render reports to the Board at the Board's quarterly meetings.A summary of the roles, responsibilities, composition and frequency of meetings of each of the committees are as stated hereunder:

Audit and Compliance CommitteeAuditing is vital to ensuring that accounting norms for insurance businesses are effectively applied and maintained and to monitor the quality of internal control procedures; ensure compliance with all regulatory directives. The Committee shall liaise with auditors and the management to review audit activities as well as the integrity of the data and information provided in the audit and/or financial reports.

The Committee provides oversight functions with regard to both the Company's financial statements and its internal audit and compliance functions. The Committee ensures compliance with legal and other regulatory requirements, assessment of qualifications and independence of the external auditor; and




performance of the Company's internal audit function as well as that of external auditors.

The Committee oversees and reviews the technical underwriting strategies of the Company.The Committee Chairman reports formally to the Board on its proceedings after each meeting on all matters within its functions and responsibilities. The Committee makes whatever recommendations to the Board as it deems appropriate on any area within its limit where action or improvement is needed.

The Committee comprised the following members and met four (4)times in the year ended 31st December, 2017 on the following dates:

The Risk Management & Audit Committee comprised the following members during the year under review:




S/N

Name of Director

Position

No of Committee meetings attended

27th March'17 19th June'17

1

Mr. A. Adeleke

Chairman

3

N/A

P

2

Prof. J. O. Irukwu

Member

4

P

P

2

Mrs. Grace Danjuma

Member

4

P

P

3

Mr. Raymond Farhat

Member

0

AB

AB

4

Mrs Nadia Fettah

Member

1

P

AB

5 Mr. R.D. Moloko Member 0 N/A AB6 Mr. C. Chagoury Member 4 P P7 Mr. M. Oeschger Member 4 P P

Finance, Investment and General Purposes CommitteeThe Finance, Investment & General Purpose Committee is responsible for the approval of investment decisions and portfolio limits by the management of the Company. This Committee has supervisory functions over investment and other finance-related issues such as capital & funding requirements.

The Committee makes recommendations of investment policies for consideration and adoption by the Board, including proposed ethical positions with respect to appropriate investments and conducts a review of the performance of the major assets in the Company’s investment portfolios on a quarterly basis.

The Committee is also responsible for identifying specific areas for review as approved by the Board, in particular the financial implications of new and major investment strategies/initiatives.The Committee comprised the following members and met four (4) times during the year under review on the following dates:

S/N

Name of Directors

Position


27th March'17 20th June'17

1

Mrs. Nadia Fettah

Chairman

1

P AB2

Mr. E. Atrib

Member

3

P AB3

Mr. J. Ijerheime

Member

3

P P4

Mr. A. Adeleke

Member

3

N/A P5

Prof. J.

O Irukwu

Member

4

P P6 Mr. M. Oeschger Member 4 P P7 Mr. Raymond Farhat Member 0 AB AB8 Mrs. G. Danjuma Member 4 P P




Enterprise Risk Management & Governance CommitteeThe Committee has supervisory functions over the entire company recruitment and ensures corporate governance compliance. The main functions of the Committee are to establish the criteria for board and board committee memberships, review candidates’ qualifications and any potential conflict of interest, assess the contribution of current directors in connection with their re-nomination and make recommendations to the Board.

The Committee advises the Board on its oversight responsibilities in relation to compensation, benefits and all other human resource matters affecting the Company. It is also responsible for reviewing and recommending the Company’s organizational structure to the Board for approval while protecting the welfare of all employees. As part of its functions also, it shall define and provide guidance on acceptable and unacceptable risks. This Committee has supervisory functions over the risk management, risk profile, enterprise-wide risk management framework and the risk-reward strategy as determined by the Board.

The Enterprise Risk Management & Governance Committee comprised the following members and met four (4) times in the year under review on the following dates:

S/N Name of Directors

Position


28th March'17

19th June'17

1 Prof. J.O Irukwu

Chairman

4

P

P2 Mr. E. Atrib

Member

3

P

AB

3 Mr. R.D. Moloko

Member

0

AB

AB4 Mr. M. Oeschger

Member

4

P

P5 Mr. J. Ijerheime

Member

3

P

P6 Mr. C.

Chagoury

Member

3

A

P7 Mr. A.

Adeleke

Member

3

N/A

P

8 Mrs. Y. Adenuga Member 4 P P

Attendance to Board and Board Committee meetingsThe table below shows the frequency of meetings of the Board of Directors, as well as members’ attendance for the year ended 31 December 2017.

The Board met four (4) times during the year under review.

Name of Director Designation No of Board meetings attended

29th Mar. '17 21st June. '17

Gen. T. Y. Danjuma(Rtd.) G.C.O.N.

Chairman

4 P P

Mr. J. Ijerheime

Managing Director

3 P PMr. Adebayo.A.

Adeleke

Non-Executive Director

4 P PMrs. Yetunde Adenuga

Executive Director

4 P PMr. Elias Atrib


4 P RMrs. Grace E. Danjuma


4 P PProfessor J.O. Irukwu


4 P PMr Raymond Farhat Non-Executive Director 1 P ABMrs. Nadia Fettah Non-Executive Director 3 P PMr. Christopher Chagoury Non-Executive Director 3 P PMr. R.D. Moloko Non-Executive Director 2 AB PMr. M. Oeschger Non-Executive Director 4 P P




ShareholdersShareholders meetings were duly convened and held in line with the Company’s Articles of Association and existing statutory and regulatory regimes in an open manner, for the purpose of deliberating on issues affecting the Company’s strategic direction. This occurs through a fair and transparent process and also serves as a medium for promoting interaction between the Board, management and shareholders. Attendance at the Annual General Meeting is open to shareholders or their proxies, while proceedings at such meetings are usually monitored by the representatives of the National Insurance Commission. The Board ensures that shareholders are provided with adequate notice of meetings. The shareholders have an opportunity to express their concerns (if any) and opinions on the Company’s financial results and all other issues at the Annual General Meeting of the Company.

The Company deals on a timely basis with all enquiries from shareholders which are communicated to management and the Board. The Company also dispatches its annual reports, providing highlights of all the Company’s activities to its shareholders.

Protection of shareholders’ rightThe Board ensures the protection of the statutory and general rights of shareholders at all times, particularly their right to attend and vote at general meetings. All shareholders are treated equally, regardless of volume of shareholding or social status.

Independent adviceThe Board of Directors are at their own discretion and at the Company’s expense are required to seek Independent professional advice when it is required to enable a Member of the Board effectively perform certain responsibilities.

Monitoring compliance with corporate governance Compliance OfficerThe Compliance Officer monitors compliance with money laundering requirements and the implementation of the Corporate Governance Code of the Company. The Compliance Officer together with the Chief Executive Officer certifies each year to NAICOM that they are not aware of any violation of the Corporate Governance Code, other than as disclosed during the course of the year.

Whistle blowing proceduresIn line with the Company’s commitment to instil the best corporate governance practices, a whistle blowing procedure was established that ensures anonymity on any reported incidents.

Code of professional conduct for employeesThe Company has in place, a Code of Conduct which specifies expected behaviour of its employees and directors. The code is designed to empower employees and directors and enable effective decision making at all levels of the business according to defined ethics and principles. The Code requires that each Company employee shall read the Code and sign a confirmation that he has understood the content. The Company also has a disciplinary guide which provides sample offences/violations and prescribes disciplinary measures to be adopted in various cases. The Head of Human Resources is responsible for the design and implementation of the Code of Conduct while the Compliance Officer is responsible for monitoring and ensuring compliance.

Non-executive directors’ remunerationThe Company’s policy on remuneration of non-executive directors is guided by the provisions of the NAICOM which stipulate that non-executive directors’ remuneration should be limited to directors’ fees and reimbursable travel and hotel expenses. Director’s fees and sitting allowances were paid to only non-executive directors as recommended by the Board Governance Committee




Management’s Commentary and AnalysisIn order to foster deeper understanding of our strategy, operating risk and performance and also in compliance with regulatory requirements, we have outlined a Management’s Commentary and Analysis (“MC&A”) report as contained hereunder.This MC&A has been prepared as at 31 December 2017 and should be read in conjunction with the consolidated financial statements of Saham Unitrust Insurance Nigeria Company Limited and subsidiary company.

Nature of businessSaham Unitrust Insurance Nigeria Limited’s major business activity is insurance. However, the Group is currently involved in property management business while also developing its capacity for expansion in the industry.

Business objective and strategySaham Unitrust Insurance Nig. Limited is registered and incorporated in Nigeria. The Company is principally engaged in providing insurance services to cater for the needs of corporate and retail sectors of the Nigerian economy.

The Company aims to evolve into a truly diversified financial services institution that provides protection against all forms of insurable risks to all customer segments.

The Company implemented the NAICOM directive on “no premium no cover policy” from 1 January 2013. The policy aims to stimulate liquidity within the system by reducing the huge receivables being carried on the statement of financial position of insurance companies. This has positively impacted the income statements of insurance companies by eliminating the large portion of provision for outstanding premium charged for the receivables and made available more cash which can be used to generate more investment income.

On the other hand, this has reduced the premium income recognised by companies initially (as premium would only be recognised when cash is received) but the situation would normalize as the insured public adjust their cash flow management to the new regulation.




Performance indicatorsOperating results and financial condition

Group Company

31-Dec-2017 31-Dec-2016 Change Change 31-Dec-2017 31-Dec-2016

Change Change

?'000 ? '000 ? '000 % ? '000 ? '000 ? '000 %

Gross premium written 2,486,736

1,929,287

557,449

29%

1,929,287 557,449 29%Net premium income 998,847

1,027,200

(28,353)

-3%

1,027,200 (28,353) -3%Underwriting profit 303,790

429,995

(126,206)

-29%

429,995 (126,206) -29%Investment income 985,446

647,725

337,722

52%

647,725 337,722 52%Claims expense(net) 291,949

355,215

(63,265)

-18%

355,215 (63,265) -18%Writeback of impairment on financial (33,342) 181 (33,523) -18521% 181 (33,523) -18521%Operating expenses (596,956) (455,247) (379,090) 174% (447,538) (150,736) 175%Profit before tax 818,041 1,309,555 (141,708) -38% 1,315,299 (500,756) -38%Basic earnings per share (kobo) 13 37 (24) -65%

2,486,736998,847303,790985,446291,949(33,342)

(598,274)814,543

13 37 (24) -65%

The Company experienced a 29% increase in Gross written premium when compared to prior year result. This increase was mainly attributable to strategic partnership and increase in market drive.

Revenue and underwriting resultThe increase in the Company’s level of activity was reflected in the increase in the Gross premium written. The underwriting profit amounted to N303.79million, a decrease of N389.31million over December 2016. The Company had a net claims expense of N291.95million, a decrease of N63.27million over December 2016.

Investment incomeInvestment income increased by 52% from N647.7 million to N985.4million. Prudent management of fund accounted for this increase. The Company will continue to intensify its efforts to ensure that investment income is a key revenue source.

Operating expensesOperating expenses for the year amounted to N614.32million (Company: N615.64million), an increase of N159.07million (Company: N168.1million) compared to prior year.

Liquidity, capital resources and risk factorsThe Group’s investment is in accordance with its investments policy which is compliant with regulatory requirements. The Group’s investment strategy is underpinned by a focus on highly liquid financial instruments such as term deposit, equity and debt instruments. At the end of December 2017, the Group had approximately N6.62million invested in fixed income instruments (Held to Maturity market securities: N6.02billion, placements in cash and cash equivalents:N597.98million) and N370.1million in equity instruments.

The Group’s approach to managing capital involves managing assets, liabilities and risks in a coordinated way, assessing shortfalls between reported and required capital level on a regular basis and taking appropriate actions to influence the capital position of the Group in the light of changes in economic conditions and risk characteristics. The Group has a net asset position of N7.80billion (Company:N7.75billion), an increase of N233.84million (Company:N231.60million).

Group Company

31-

Dec2016

31-

Dec2015 Change Change

31-

Dec2016

31-

Dec2015

Chang

e Change

? '000 ? '000 ? '000 % ? '000 ? '000 ? '000 %

1,929,287 2,456,292 (527,005) (21%) 1,929,287 2,456,292 (527,005

) (21%)

1,027,200 1,384,180 (356,980) (26%) 1,027,199 1,384,180 (356,981)

(26%)

429,955 693,101 (263,146) (41%) 429,955 693,101 (284,176)

(41%)

647,725 907,596 (259,871) (29%) 647,725 907,596 (259,871)

(29%)

355,215 568,873 (213,658) (38%) 355,215 568,873 (213,235)

(38%)

of impairment on 181 84,413 (84,232) (100%) 181 84,413 (84,232) (100%)

(455,246) (595,986) 161,810 (27%) (426,468) (593,211) 166,744 (28%)

1,309,555 1,311,950 (2,395) (0.2%) 1,315,299 1,312,715 2,584 (0.2%)

24 37 (13) (36%) 24 37 (13) (36%)



In compliance with the provisions of Section 359 (6) of the Companies and Allied Matters Act of Nigeria, we have reviewed the consolidated and separate financial statements of Saham Unitrust Insurance Nigeria Limited for the year ended 31 December 2017 and hereby state as follows:

- The scope and planning of the audit were adequate in our opinion;

- The accounting and reporting policies of the Group and Company conformed with the statutory requirements and agreed ethical practices;

- The internal control and internal audit functions were operating effectively;

- The external auditor’s findings as stated in the management letter are being dealt with satisfactorily by the management;

_____________________________________Mr. Adebayo. A. AdelekeChairman, Audit and Compliance CommitteeFRC/2013/NIM/0000000231728 March 2018

Members of the Committee:

Mr. A.A. Adeleke - ChairmanProf. J.O Irukwu - Non - Executive DirectorMrs. Grace Danjuma - Non - Executive DirectorMr. Raymond Farhat - Non - Executive Director Mrs. Nadia Fettah - Non - Executive DirectorMr. Christopher Chagoury - Non - Executive DirectorMr. Raoul Moloko - Non - Executive Director

Report of the Risk Management and Audit Committee

INDEPENDENT AUDITOR’S REPORT

Independent Auditor’s ReportTo the Shareholders of Saham Unitrust Insurance Nig. Limited

Report on the Audit of the financial statements

OpinionWe have audited the accompanying consolidated and separate financial statements of Saham Unitrust Insurance Nigeria Limited which comprise the statement of financial position as at 31 December 2017, the statement of profit or loss and other comprehensive income, statement of changes in equity, statement of cash flow for the year then ended, and the notes to the consolidated and separate financial statements including a summary of significant accounting policies.

In our opinion, the accompanying consolidated and separate financial statements presents fairly in all material respects the financial position of Saham Unitrust Insurance Nigeria Limited as at 31 December, 2017 and the financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standards, the Companies and Allied Matters Act Cap C20 LFN 2004, Insurance Act I17 LFN 2004 and the Financial Reporting Council of Nigeria Act, 2011.

Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group and subsidiary company in accordance with the Institute of Chartered Accountants of Nigeria (ICAN) Professional Code of Conduct and Guide for Accountants and other independence requirements applicable to performing audits of financial statements in Nigeria. We have fulfilled our other ethical responsibilities in accordance with the ICAN Code and in accordance with other ethical requirements applicable to performing audits in Nigeria. The ICAN Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and separate financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

PC Box 965MarinaLagos Nigeria

Deloitte & ToucheCivic Towers Plot GA 1 Ozumba Mbadiwe AvenueVictoria Island, LagosNigeria

Tel: +234 (1) 904 1700www.deloitte.com/ng

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INDEPENDENT AUDITOR’S REPORT Cont’d



Key Audit Matter How the matter was addressed in the audit

Valuation of Insurance Contracts Liabilities

Under IFRS 4, the Company is required to perform liability adequacy test on its insurance contract liabilities to ensure the carrying value of the liabilities is adequate.

As disclosed in note 39 to the financial statements, the insurance contract liabilities of the Company amounted to N3.37 billion [2016: 2.45 billion]. This represents about 67.8% of the Company total liabilities as at 31 December 2017.

Reserves for losses and loss adjustment expenses represent estimates of future payments of reported and unreported claims for losses and related expenses as at 31 December 2017. This involves exercise of significant judgement and use of key inputs and assumptions such as inflation, claims development patterns and regulatory changes. Specifically, long-tail lines of business, which often have low frequency, high severity claims settlements, are generally more difficult to project and subject to greater uncertainties than short-tail, high frequency claims. Further, not all catastrophic events can be modelled using actuarial methodologies, which increases the degree of judgment needed in estimating general insurance loss reserves.

At the end of each financial year, management employ the services of an external actuary in the determination of its insurance liability after considering the accuracy and integrity of data used in the valuation. Necessary adjustments are made in the financial statements to reflect the liabilities determined by the actuary

Our procedures included the following among others:

We assessed and tested the design and operating effectiveness of selected key controls over actuarial methodology, integrity of data used in the actuarial valuation, and the assumptions setting and governance processes used by management relating to the valuation of general insurance reserves.

In relation to the particular matters set out above, our substantive testing procedures included the following: Tested the completeness and accuracy of underlying claims data utilized by the company’s actuaries in estimating general insurance loss reserves. Utilized information technology audit techniques to analyse claims through claims data plausibility checks and r eca l cu l a t i on o f c l a ims deve lopmen t patterns.Involved Deloitte’s actuarial specialists to independently test management’s general insurance loss reserve studies and evaluate the reasonableness of the methodology and assumptions used against recognized actuarial practices and industry standards.

Performed independent re-projections on selected product lines, particularly focusing on the largest and most uncertain general insurance reserves. For these product lines our actuarial specialists compared their re-projected reserves to those recorded by the company, and sought to understand any significant differences. Performed sens i t iv i ty tes t ing and eva lua ted the appropriateness of any significant adjustments made to management’s general insurance reserve estimates.

Based on the work performed we determined that the methodology and assumptions used by management in the valuation of insurance contract liabilities reserves are reasonable and in line with financial reporting requirements and industry accepted practice.

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Other InformationThe directors are responsible for the other information. The other information comprises the Corporate Governance Report, Management Commentary, Enterprise Risk Management Report, Directors’ Report, Chairman’s Statement, Result at a glance and MD/CEO’s review, which we obtained prior to the date of this auditor’s report. The other information does not include the consolidated and separate financial statements and our auditor’s report thereon.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the Consolidated and Separate Financial StatementsThe directors are responsible for the preparation and fair presentation of the Consolidated and Separate Financial Statements in accordance with International Financial Reporting Standards and the requirements of the Companies and Allied Matters Act CAP C20 LFN 2004, Insurance Act I17 2004 and Financial Reporting Council Act, 2011 and for such internal control as the directors determine is necessary to enable the preparation of Consolidated and Separate Financial Statements that are free from material misstatement, whether due to fraud or error

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial StatementsOur objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Consolidated and Separate Financial Statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Consolidated and Separate Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for

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one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists relating to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Consolidated and Separate Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to continue as a going concern. Evaluate the overall presentation, structure and content of the Consolidated and Separate Financial Statements, including the disclosures, and whether the company’s Consolidated and Separate Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consolidated and Separate Financial Statements. We are responsible for the direction, supervision and performance of the company’s audit. We remain solely responsible for our audit opinion.

We communicate with the Audit Committee and the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit

We also provide the Audit Committee and directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Report on Other Legal and Regulatory RequirementsIn accordance with the Sixth Schedule of the Companies and Allied Matters Act CAP C20 LFN 2004 and Section 28(2) of Insurance Act CAP I17 LFN 2004, we expressly state that:

i) We have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) The Group has kept proper books of account, so far as appears from our examination of those books.




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iii) The Group’s statement of financial position and its statement of profit or loss and other comprehensive income are in agreement with the books of account.

ContraventionsThe Group has not contravened any sections of the Insurance Act; NAICOM circulars and guidelines during the year.

For: Deloitte & Touche Chartered AccountantsLagos, Nigeria24 May, 2018

Engagement partner: David AchugamonuFRC/2013/ICAN/00000000840




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Statements of Accounting Policies for the year ended 31st December 2017

1 Legal entitySaham Unitrust Insurance Nigeria Limited (“the Company”) was incorporated on 9 November 1981 as a private limited liability company as “Union Nigeria Insurance Company Limited”. The address of the Company’s registered office is Plot 105B, Ajose Adeogun Victoria Island, Lagos. The Company’s name was changed to Unitrust Insurance Company Limited on 3 May 1983 and obtained general and life insurance licenses from the National lnsurance Commission on 13 August 1986 and 10 January 1999 respectively. Following the recapitalisation exercise in February 2007, the Company focused on its general insurance business and discontinued its life business in 2007.

The Company’s principal activity continues to be provision of risk underwriting and related financial services to its customers. Such services include provision of general insurance services to both corporate and individual customers.

The Company has one wholly owned subsidiary, Unitrust Global Assets Management Limited. The subsidiary was incorporated as a private limited liability company on 9 January 2001 and its principal activity involves provision of property management services to both individual and corporate clients.

The financial results of the subsidiary have been consolidated in these financial statements.

2 Basis of preparation These consolidated and separate financial statements are prepared in accordance with

International Financial Reporting Standards (IFRS) as issued by International Accounting Standards Board (IASB). They have been prepared under the historical cost convention, as modified by the revaluation of land and buildings and investment property except for available-for-sale securities which are measured at fair value.

The directors are of the opinion that the Company will continue as a going concern for the foreseeable future.

(a) Statement of complianceThe consolidated and separate financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs as issued by the International Accounting Standard Board) and in the manner required by the Companies and Allied Matters Act of Nigeria, the Financial Reporting Council of Nigeria Act, 2011, the Insurance Act of Nigeria, and relevant National Insurance Commission (NAICOM) guidelines and circulars, to the extent that they do not conflict with the requirement of IFRS.

The consolidated financial statements were authorised for issue by the Board of directors on 28 March 2017

(b) Basis of measurementThe consolidated and separate financial statements have been prepared under the historical cost basis except for the following:

(i) Financial instruments at fair value through profit or loss are measured at fair value (ii) Available-for-sale financial assets are measured at fair value.(iii) Land and buildings are carried at revalued amount.(iv) Investment properties are measured at fair value



(c) Functional and presentation currencyItems included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’). The consolidated financial statements are presented in thousands of Naira (N), which is the Group’s presentation currency.

(d) Use of estimates and judgementsThe preparation of the consolidated and separate financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are described in note 6.

(e) Regulatory authority and financial reportingThe Company is regulated by the National Insurance Commission of Nigeria (NAICOM) under the National Insurance Act of Nigeria. The Act specifies certain provisions which have impact on financial reporting as follows:

i) Section 20(1a) provides that provisions for unexpired risks shall be calculated on a time apportionment basis of the risks accepted in the year;

ii) Section 20(1b) requires provision for outstanding claims to be credited with an amount equal to the total estimated amount of all outstanding claims with a further amount representing 10 percent of the estimated figure for outstanding claims in respect of claims incurred but not reported at the end of the year under review;

iii) Sections 21(1a) and 22(1b) require maintenance of contingency reserves for general and life businesses respectively at specified rates as set out under note 5(w) to cover fluctuations in securities and variation in statistical estimates;

iv) Section 24 requires the maintenance of a margin of solvency to be calculated in accordance with the Act.

(v) Section 10(3) requires insurance companies in Nigeria to deposit 10 percent of the minimum paid up share capital with the Central Bank of Nigeria.

(vi) Section 25(1) requires an insurance company operating in Nigeria to invest and hold invested in Nigeria assets equivalent to not less than the amount of policy holders’ funds in such accounts of the insurer. See note 7 for assets allocation that covers policy holders’ funds.

Statements of Accounting Policies Cont’d






However, section 59 of the Financial Reporting Council Act, 2011 (FRC Act) provides that in matters of financial reporting, if there is any inconsistency between the FRC Act and the provision of other Acts, the FRC Act shall prevail. The Financial Reporting Council of Nigeria acting under the provisions of the FRC Act has promulgated IFRS as the national financial reporting framework for Nigeria. Consequently, the following provision of the National Insurance Act, 2003 which conflict with the provisions of IFRS have not been adopted:

i) Section 20(1b) which requires the provision of 10 percent for outstanding claims in respect of claims incurred but not reported at the end of the year under review. See note 4(r) on accounting policy for outstanding claims.

3 Application of new and revised International Financial Reporting Standards (IFRS)

3.1 New and revised IFRSs affecting amounts reported and/or disclosures in the financial statementsIn the current year, the Group has applied a number of amendments to IFRSs and a new Interpretation issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2014.

3.1.1 Amendments to IFRS 10, IFRS 12 and IAS 27 Investment EntitiesThe amendments to IFRS 10 define an investment entity and require a reporting entity that meets the definition of an investment entity not to consolidate its subsidiaries but instead to measure its subsidiaries at fair value through profit or loss in its consolidated and separate financial statements.

To qualify as an investment entity, a reporting entity is required to:

• Obtain funds from one or more investors for the purpose of providing them with investment management services,

• Commit to its investor(s) that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and

• Measure and evaluate performance of substantially all of its investments on a fair value basis.

Consequential amendments have been made to IFRS 12 and IAS 27 to introduce new disclosure requirements for investment entities.

As the company is not an investment entity (assessed based on the criteria set out in IFRS 10 as at 1 January 2014), the application of the amendments has had no impact on the disclosures or the amounts recognised in the Company’s financial statements.

3.1.2 Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities The amendments to IAS 32 clarify the requirements relating to the offset of financial assets and financial liabilities. Specifically, the amendments clarify the meaning of ‘currently has a legally enforceable right of set-off’ and ‘simultaneous realisation and settlement’. As the Company does not have any financial assets and financial liabilities that qualify for offset, the application of the amendments has had no impact on the disclosures or on the amounts recognised in the Group’s financial statements.




3.1.3 Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial AssetsThe amendments to IAS 36 remove the requirement to disclose the recoverable amount of a cash-generating unit (CGU) to which goodwill or other intangible assets with indefinite useful lives had been allocated when there has been no impairment or reversal of impairment of the related CGU. Furthermore, the amendments introduce additional disclosure requirements applicable to when the recoverable amount of an asset or a CGU is measured at fair value less costs of disposal. These new disclosures include the fair value hierarchy, key assumptions and valuation techniques used which are in line with the disclosure required by IFRS 13 Fair Value Measurements.

The application of these amendments has had no material impact on the disclosures in the Company’s financial statements.

3.1.4 Amendments to IAS 39 Novation of Derivatives and Continuation of Hedge AccountingThe amendments to IAS 39 provide relief from the requirement to discontinue hedge accounting when a derivative designated as a hedging instrument is novated under certain circumstances. The amendments also clarify that any change to the fair value of the derivative designated as a hedging instrument arising from the novation should be included in the assessment and measurement of hedge effectiveness.

The amendments require retrospectively. As the Company does not have any derivatives that are subject to novation, the application of these amendments has had no impact on the disclosures or on the amounts recognised in the Company’s financial statements.

3.1.5 IFRIC 21 LeviesThe Company has applied IFRIC 21 Levies for the first time in the current year. IFRIC 21 addresses the issue as to when to recognise a liability to pay a levy imposed by a government. The Interpretation defines a levy, and specifies that the obligating event that gives rise to the liability is the activity that triggers the payment of the levy, as identified by legislation. The Interpretation provides guidance on how different levy arrangements should be accounted for, in particular, it clarifies that neither economic compulsion nor the going concern basis of financial statements preparation implies that an entity has a present obligation to pay a levy that will be triggered by operating in a future period.

The impact of the application of this Interpretation has been included in the Statement of Profit or Loss under NAICOM levy.

3.2 New and revised IFRSs in issue but not yet effectiveThe company has not applied the following new and revised IFRSs that have been issued but are not yet effective:

IFRS 9 Financial Instruments 5IFRS 15 Revenue from Contracts with Customers 4Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations 3 Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation 3Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants3Amendments to IAS 19 Defined Benefit Plans: Employee Contributions 1




Amendments to IFRSs ———————— Annual Improvements to IFRSs 2010-2012 Cycle2Amendments to IFRSs ———————— Annual Improvements to IFRSs 2011-2013 Cycle11. Effective for annual periods beginning on or after 1 July 2014, with earlier application

permitted.2. Effective for annual periods beginning on or after 1 July 2014, with limited exceptions.

Earlier application is permitted.3. Effective for annual periods beginning on or after 1 January 2016, with earlier application

permitted.4. Effective for annual periods beginning on or after 1 January 2017, with earlier application

permitted.5. Effective for annual periods beginning on or after 1 January 2018, with earlier application

permitted.

IFRS 9 Financial InstrumentsIFRS 9, issued in November 2009, introduced new requirements for the classification and measurement of financial assets. IFRS 9 was amended in October 2010 to include requirements for the classification and measurement of financial liabilities and for derecognition.

Key requirements of IFRS 9All recognised financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement are required to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at their fair value at the end of subsequent accounting periods. In addition, under IFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognised in profit or loss.

With regard to the measurement of financial liabilities designated as at fair value through profit or loss, IFRS 9 requires that the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is presented in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. Under IAS 39, the entire amount of the change in the fair value of the financial liability designated as fair value through profit or loss is presented in profit or loss.

The Directors of the Company anticipate that the application of IFRS 9 in the future may have a significant impact on amounts reported in respect of the financial assets and financial liabilities. However, it is not practicable to provide a reasonable estimate of the effect of IFRS 9 until the Company undertakes a detailed review.

IFRS 15 Revenue from Contracts with CustomersIn May 2014, IFRS 15 was issued which establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. IFRS 15 will supersede the current revenue recognition guidance including IAS 18 Revenue, IAS 11 Construction Contracts and the related Interpretations when it becomes effective.




The core principle of IFRS 15 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the Standard introduces a 5-step approach to revenue recognition:

• Step 1: Identify the contract(s) with a customer• Step 2: Identify the performance obligations in the contract• Step 3: Determine the transaction price• Step 4: Allocate the transaction price to the performance obligations in the contract• Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Under IFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance has been added in IFRS 15 to deal with specific scenarios.

Furthermore, extensive disclosures are required by IFRS 15. The directors of the Company anticipate that the application of IFRS 15 in the future may have a material impact on the amounts reported and disclosures made in the Company’s financial statements. However, it is not practicable to provide a reasonable estimate of the effect of IFRS 15 until the Company performs a detailed review. “

Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint OperationsThe amendments to IFRS 11 provide guidance on how to account for the acquisition of a joint operation that constitutes a business as defined in IFRS 3 Business Combinations. Specifically, the amendments state that the relevant principles on accounting for business combinations in IFRS 3 and other standards (e.g. IAS 36 Impairment of Assets regarding impairment testing of a cash generating unit to which goodwill on acquisition of a joint operation has been allocated) should be applied.

The same requirements should be applied to the formation of a joint operation if and only if an existing business is contributed to the joint operation by one of the parties that participate in the joint operation.A joint operator is also required to disclose the relevant information required by IFRS 3 and other standards for business combinations.”

The amendments to IFRS 11 apply prospectively for annual periods beginning on or after 1 January 2016. The directors of the Company do not anticipate that the application of these amendments to IFRS 11 will have a material impact on the Company’s financial statements.

Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and AmortisationThe amendments to IAS 16 prohibit entities from using a revenue-based depreciation method for items of property, plant and equipment. The amendments to IAS 38 introduce a rebuttable presumption that revenue is not an appropriate basis for amortisation of an intangible asset. This presumption can only be rebutted in the following two limited circumstances: a) When the intangible asset is expressed as a measure of revenue; orb) When it can be demonstrated that revenue and consumption of the economic benefits of

the intangible asset are highly correlated.




The amendments apply prospectively for annual periods beginning on or after 1 January 2016. Currently, the Company uses the straight-line method for depreciation and amortisation for its property, plant and equipment, and intangible assets respectively. The directors of the Company believe that the straight-line method is the most appropriate method to reflect the consumption of economic benefits inherent in the respective assets and accordingly, the directors of the Company do not anticipate that the application of these amendments to IAS 16 and IAS 38 will have a material impact on the Company’s financial statements. Amendments to IAS 16 and IAS 41 Agriculture: Bearer PlantsThe amendments to IAS 16 and IAS 41 define a bearer plant and require biological assets that meet the definition of a bearer plant to be accounted for as property, plant and equipment in accordance with IAS 16, instead of IAS 41. The produce growing on bearer plants continues to be accounted for in accordance with IAS 41. The directors of the Company do not anticipate that the application of these amendments to IAS 16 and IAS 41 will have a material impact on the Company’s financial statements as the Company is not engaged in agricultural activities

Amendments to IAS 19 Defined Benefit Plans: Employee ContributionsThe amendments to IAS 19 clarify how an entity should account for contributions made by employees or third parties to defined benefit plans, based on whether those contributions are dependent on the number of years of service provided by the employee.

For contributions that are independent of the number of years of service, the entity may either recognise the contributions as a reduction in the service cost in the period in which the related service is rendered, or to attribute them to the employees’ periods of service using the projected unit credit method; whereas for contributions that are dependent on the number of years of service, the entity is required to attribute them to the employees’ periods of service.

The directors of the Company do not anticipate that the application of these amendments to IAS 19 will have a significant impact on the Company’s financial statements.

Annual Improvements to IFRSs 2010-2012 CycleThe Annual Improvements to IFRSs 2010-2012 Cycle include a number of amendments to various IFRSs, which are summarised below.

The amendments to IFRS 2 (i) change the definitions of ‘vesting condition’ and ‘market condition’; and (ii) add definitions for ‘performance condition’ and ‘service condition’ which were previously included within the definition of ‘vesting condition’. The amendments to IFRS 2 are effective for share-based payment transactions for which the grant date is on or after 1 July 2014.

The amendments to IFRS 3 clarify that contingent consideration that is classified as an asset or a liability should be measured at fair value at each reporting date, irrespective of whether the contingent consideration is a financial instrument within the scope of IFRS 9 or IAS 39 or a non-financial asset or liability. Changes in fair value (other than measurement period adjustments) should be recognised in profit and loss. The amendments to IFRS 3 are effective for business combinations for which the acquisition date is on or after 1 July 2014.

The amendments to IFRS 8 (i) require an entity to disclose the judgements made by management in applying the aggregation criteria to operating segments, including a description of the operating segments aggregated and the economic indicators assessed in determining whether the operating segments have ‘similar economic characteristics’; and (ii) clarify that a




reconciliation of the total of the reportable segments’ assets to the entity’s assets should only be provided if the segment assets are regularly provided to the chief operating decision-maker.

The amendments to the basis for conclusions of IFRS 13 clarify that the issue of IFRS 13 and consequential amendments to IAS 39 and IFRS 9 did not remove the ability to measure short- term receivables and payables with no stated interest rate at their invoice amounts without discounting, if the effect of discounting is immaterial. As the amendments do not contain any effective date, they are considered to be immediately effective. The amendments to IAS 16 and IAS 38 remove perceived inconsistencies in the accounting for accumulated depreciation/amortisation when an item of property, plant and equipment or an intangible asset is revalued. The amended standards clarify that the gross carrying amount is adjusted in a manner consistent with the revaluation of the carrying amount of the asset and that accumulated depreciation/amortisation is the difference between the gross carrying amount and the carrying amount after taking into account accumulated impairment losses.

The amendments to IAS 24 clarify that a management entity providing key management personnel services to a reporting entity is a related party of the reporting entity. Consequently, the reporting entity should disclose as related party transactions the amounts incurred for the service paid or payable to the management entity for the provision of key management personnel services. However, disclosure of the components of such compensation is not required.

The directors of the Company do not anticipate that the application of these amendments will have a significant impact on the Company’s financial statements. Annual Improvements to IFRSs 2011-2013 CycleThe Annual Improvements to IFRSs 2011-2013 Cycle include a number of amendments to various IFRSs, which are summarised below.

The amendments to IFRS 3 clarify that the standard does not apply to the accounting for the formation of all types of joint arrangement in the financial statements of the joint arrangement itself.

The amendments to IFRS 13 clarify that the scope of the portfolio exception for measuring the fair value of a Company of financial assets and financial liabilities on a net basis includes all contracts that are within the scope of, and accounted for in accordance with, IAS 39 or IFRS 9, even if those contracts do not meet the definitions of financial assets or financial liabilities within IAS 32.

The amendments to IAS 40 clarify that IAS 40 and IFRS 3 are not mutually exclusive and application of both standards may be required. Consequently, an entity acquiring investment property must determine whether:

(a) The property meets the definition of investment property in terms of IAS 40; and

(b) The transaction meets the definition of a business combination under IFRS 3.

The directors of the Company do not anticipate that the application of these amendments will have a significant impact on the Company’s financial statements.


Unitrust Insurance Company Limited and Subsidiary Company


4 Significant accounting policies

These principal accounting policies set out below have been consistently applied for all years presented, except for the changes explained in Note 3 above.

(a) Basis of ConsolidationBusiness combinations are accounted for using the acquisition method as at the acquisition date – i.e. when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if they are related to the issue of debt or equity securities.The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.”

The Consolidation statements incorporate the financial statements of the company (Saham Unitrust Insurance Nigeria Ltd.) and its subsidiary (Unitrust Global Asset Management Ltd). The subsidiaryis controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. Total comprehensive income of subsidiaries is attributed to the owners of the company.

(i) SubsidiariesSubsidiaries are investees controlled by the Group. The Group ‘controls’ an investee if it is exposed to, or has rights to, variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date when control ceases.

Intra-group balances and transactions and any unrealized income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(ii) Transactions eliminated on consolidationIntra-group balances and transactions and any unrealized income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment




NCI are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

(b) Foreign currency translation

Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within ‘finance income or cost’. All other foreign exchange gains and losses are presented in the income statement within ‘Other operating income’ or ‘Other operating expenses’.

Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are analysed between translation differences resulting from changes in the fair value of the security, and other changes in the carrying amount of the security. Translation differences related to changes in amortised cost are recognised in profit or loss; other changes in carrying amount are recognised in ‘other comprehensive income’.

Translation differences on non-monetary financial assets such as equities classified as available-for-sale financial assets are included in ‘other comprehensive income’.”

(c) Insurance contract - Recognition and measurement

(I) Premiums Gross premium written comprise the premiums received on insurance contracts entered into during the year, irrespective of whether they relate in whole or in part to a later accounting period. This is in compliance with Section 50 of the Insurance Act, 2003 and the National Insurance Commission Guidelines on Insurance Premium Collection and Remittance (effective 1 January 2013) on “No Premium, No Cover”. Gross premium earned represents premium as earned from the date of attachment of risk, over the insurance period on a time apportionment basis.

Premiums on reinsurance inward are included in gross written premiums and accounted for as if the reinsurance was direct business, taking into account the product classification of the reinsured business.

Outward reinsurance premiums are accounted for in the same accounting period as the premiums for the related direct insurance or reinsurance business assumed. Outward reinsurance premiums are recognized as an expense in accordance with the pattern of premium earned.




The earned portion

(ii) Unearned premiums Unearned premiums are proportion of premiums written in the year that relate to periods of risks after the reporting date. It is computed separately for each insurance contract using a time proportionate basis, or another suitable basis for uneven risk contracts. Provision for unexpired risk is made for unexpired risks arising where the expected value of claims and expenses attributable to the unexpired period of policies in force at the reporting date exceeds the unearned premium in relation to such policies after deduction of any deferred acquisition costs.

(iii) ReinsuranceThe Group cedes reinsurance in the normal course of business for the purpose of limiting its net potential losses on policies written. Premium ceded comprise written premiums ceded to reinsurers, adjusted for the reinsurers’ share of the movement in the provision for the unearned premiums. Reinsurance arrangements do not relieve the Group from its direct obligations to its policyholders.

(a) Reinsurance asset and Liabilities The benefits to which the Group is entitled under its reinsurance contracts held are

recognised as reinsurance assets. These assets consist of short-term balances due from reinsurers, as well as longer term receivables that are dependent on the expected claims and benefits arising under the related reinsured insurance contracts. Amounts recoverable from or due to reinsurers are measured in accordance with the terms of each reinsurance contract. Reinsurance liabilities are primarily premiums payable for reinsurance contracts and are recognised as an expense when incurred.

The Group had the right to set-off re-insurance payables against the amount due from re-insurance and brokers in line with the agreed arrangement between both parties.

Reinsurance recoverables are estimated in a manner consistent with the outstanding claims provision and claims incurred associated with the reinsurers polices and in accordance with the related insurance contract. They are measured at their carrying amount less impairment charges. Amounts recoverable under reinsurance contracts are assessed for impairment at each reporting date. If there is objective evidence of impairment, the Group reduces the carrying amount of its insurance assets to its recoverable amount and recognizes the impairment loss in the income statement.

(b) Reinsurance Expense Reinsurance expense represents outward premium paid to reinsurance companies

less the unexpired portion as at the end of the accounting year.

(iv) Commission incomeCommission income is recognized on ceding business to the reinsurer, and are credited to the profit and loss account.




(v) ClaimsClaims and loss adjustment expenses are recognized in profit or loss and other comprehensive income as incurred based on the estimated liability for compensation owed to the contract holders or beneficiaries. They include direct and indirect claims settlement cost and arise from events that have occurred up to the reporting period, whether they have been reported or not. The Group does not discount its liabilities for unpaid claims.

The provision for outstanding claims, is estimated based on historic information on reported cases and the ultimate liability may vary as a result of subsequent information and events and may result in significant adjustments to the amounts provided. Adjustments to the amounts of claims provision for prior years are reflected in profit or loss in the financial period in which adjustments are made, and disclosed separately if material.

The measurement of outstanding claims have been detailed out under note 4(r) (Insurance contract liabilities).

Reinsurance recoverables are recognized when the Group records the liability for the claims and are not netted off claims expense but are presented separately in profit or loss.

(vi) SalvagesSome non-life insurance contracts permit the Group to sell (usually damaged) property acquired in the process of settling a claim. The Group may also have the right to pursue third parties for payment of some or all costs of damages to its client’s property (i.e. subrogation right).

Salvage recoveries are used to reduce the claim expense.

(vii) SubrogationSubrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid to the insured for the loss. A receivable for subrogation is recognized in other assets when the liability is settled and the Group has the right to receive future cash flow from the third party.

(viii) Underwriting expensesUnderwriting expenses comprise acquisition and maintenance expenses comprising commission and policy expenses, other direct costs. Underwriting expenses for insurance contracts are recognized as expense when incurred, with the exception of acquisition costs which are recognized on a time apportionment basis in respect of risk.

(vix) Receivables and payables related to insurance contractsInsurance receivables and payables are recognised when due. These include amounts due to and from agents, brokers and insurance contract holders. If there is objective evidence that the insurance receivable is impaired, the Group reduces the carrying amount of the insurance receivable accordingly and recognises the impairment loss in profit or loss. The Group determines the objective evidence that an insurance receivable is impaired using the same methodology adopted for




financial assets held at amortised cost. The impairment loss is calculated using the same method used for these financial assets. See 4(e)(I)

(D) Other income

(I) Investment and other operating incomeInvestment income comprises interest income earned on short-term deposits, Treasury bills, Federal Government of Nigeria bonds rental income and income earned on trading of securities including all realised and unrealised fair value changes, interest, dividends and foreign exchange differences. Investment income is accounted for on an accrual basis.

Interest income and expenses for all interest-bearing financial instruments are recognised within ‘investment income’ and ‘finance costs’ in the income statement using the effective interest rate method respectively. Fees and commissions that form part of an integral part of the effective yield of a financial instrument are recognised as an adjustment to the effective interest rate of the instrument. When a receivable is impaired, the Company reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument.

(ii) Dividend incomeDividend is recognized as earned when the Company’s right to receive payment has been established and is stated net of withholding tax. The right to receive dividend is established when the dividend has been duly declared.

(E) Management expensesManagement expenses are expenses other than claims and underwriting expenses.They are accounted for on an accrual basis and comprise the following:

Employee benefits

Short-term benefitsShort-term employee benefit obligations include wages, salaries and other benefits which the Group has a present obligation to pay, as a result of employees’ services provided up to the reporting date. Short-term benefits are not discounted.

A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Post-employment benefitsThe Group operates a defined contributory retirement scheme as stipulated in the Pension Reform Act 2004 as amended in 2014. Under the defined contribution scheme, the Company pays fixed contributions of 10% to a separate entity – Pension Fund Administrators; employees also pay (through deduction from payroll) 8% to the same entity. Once the contributions have been paid, the Group retains no legal or constructive obligation to pay further contributions if the Fund does not hold enough assets to finance benefits accruing under the retirement benefit plan. The Group’s obligations are recognized in the profit and loss account.




(F) Cash and cash equivalentsCash and cash equivalents include cash in hand and at bank, call deposits and short term highly liquid financial assets with original maturities of three months or less from the acquisition date, which are subject to insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments.

Cash and cash equivalents are carried at amortised cost in the statement of financial position.

(G) Financial assets and liabilities

(I) ClassificationThe classification of financial assets depends on the purpose for which the investmentswere acquired or originated. The Group classifies its financial assets into the followingcategories:

- Financial assets at fair value through profit or loss;- Held-to-maturity investments;- Loans and receivables, and - Available-for-sale financial assets

The Group’s financial assets include cash and short term deposits, trade and other receivables, commercial loans, quoted and unquoted equity instruments.

The Group’s financial liabilities are classified as other financial liabilities. They include: insurance contract liabilities, trade payables and other payables.

(ii) Initial recognitionThe Group initially recognises loans and advances, fixed deposits, treasury bills and securities on the date that they are originated. All other financial assets and liabilities (including assets and liabilities designated at fair value through profit or loss) are initially recognised on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

All financial assets or financial liabilities are measured initially at their fair value plus transaction costs, except in the case of financial assets and financial liabilities recorded at fair value through profit or loss. Subsequent recognition of financial assets and liabilities is at amortised cost or fair value.

(iii) Subsequent measurementFinancial assets held at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading. Financial assets classified as trading are acquired principally for the purpose of selling in the short term.

These investments are initially recorded at fair value. Subsequent to initial recognition, they are re-measured at fair value, with gains and losses arising from changes in this value recognized in the income statement in the period in which they arise. The fair values of quoted investments in active markets are based on current bid prices. The fair values of unquoted equities, and quoted equities for




which there is no active market, are established using valuation techniques corroboratedby independent third parties. These may include reference to the current fair value ofother instruments that are substantially the same and discounted cash flowanalysis.

Interest earned and dividends received while holding trading assets at fair value through profit or loss are included in investment income.

Available-for-saleAvailable-for-sale investments are non-derivative instruments that are not designated as another category of financial assets.Available-for-sale financial assets are carried at fair value, with the exception of investments in equity instruments where fair value cannot be reliably determined, which are carried at cost. Fair values are determined in the same manner as for investments at fair value through profit or loss. Unrealised gains and losses arising from changes in the fair value of available-for-sale financial assets are recognised in other comprehensive income while the investment is held, and are subsequently transferred to the income statement upon sale or de-recognition of the investment.

Interest income is recognised in profit or loss using the effective interest method. Dividends received on available-for-sale instruments are recognised in income statement when the Company’s right to receive payment has been established.

Held-to-maturityHeld-to-maturity investments are non-derivative financial assets with fixed determinable payments and fixed maturities that management has both the positive intention and ability to hold to maturity other than:

- Those that the Group designates as available for sale.

- Those that meet the definition of loans and receivables.

Such instruments include fixed deposits, placements and government bonds and are carried at amortised cost, using the effective interest rate method less any allowance for impairment.

Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than those classified by the Group as fair value through profit or loss or available-for-sale.

Loans and receivables consist primarily of trade receivables, commercial loans, staff loans, and other debtors.

Loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Loans granted at below market rates are fair valued by reference to expected future cash flows and current market interest rates for instruments in a comparable or similar risk class and the difference between the historical cost and fair value is accounted for as employee benefits under staff costs.




Trade receivables arising from insurance contracts are stated after deducting specific impairment on premium outstanding from brokers for over 30 days. Trade receivables are reviewed at every reporting period for impairment (See 4(e)iii for the accounting policy on impairment of trade receivables).

Fair value measurementFair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk.

When available, the Group measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

If there is no quoted price in an active market, then the Group uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.

The best evidence of the fair value of a financial instrument at initial recognition is normally the transaction price – i.e. the fair value of the consideration given or received. If the Group determines that the fair value at initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique that uses only data from observable markets, then the financial instrument is initially measured at fair value, adjusted to defer the difference between the fair value at initial recognition and the transaction price. Subsequently, that difference is recognised in profit or loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out.

If an asset or a liability measured at fair value has a bid price and an ask price, then the Group measures assets and long positions at a bid price and liabilities and short positions at an ask price.

Portfolios of financial assets and financial liabilities that are exposed to market risk and credit risk that are managed by the Group on the basis of the net exposure to either market or credit risk are measured on the basis of a price that would be received to sell a net long position (or paid to transfer a net short position) for a particular risk exposure. Those portfolio-level adjustments are allocated to the individual assets and liabilities on the basis of the relative risk adjustment of each of the individual instruments in the portfolio.

The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred. The Group discloses fair value of all its financial instruments.

De-recognition of financial instrumentsThe Group derecognises a financial asset when the contractual rights to the cash flows




from the asset expire, or when its rights to receive the contractual cash flows on the financial asset in a transaction that transfers substantially all the risks and rewards of ownership of the financial asset are transferred, or when it assumes an obligation to pay those cash flows to one or more recipients, subject to certain criteria.

Any interest in transferred financial assets that is created or retained by the Group is recognized as a separate asset or liability.

On derecognition of financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset transferred), and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

The Group enters into transactions whereby it transfers assets recognised on its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets or a portion of them. If all or substantially all risks and rewards are retained, then the transferred assets are not derecognised. Transfers of assets with retention of all or substantially all risks and rewards include, for example, securities lending and repurchase transactions.

In transactions in which the Group neither retains nor transfers substantially all the risks and rewards of ownership of a financial asset and it retains control over the asset, the Group continues to recognise the asset to the extent of its continuing involvement, determined by extent to which it is exposed to changes in the value of the transferred asset.

The rights and obligations retained in the transfer are recognised separately as assets and liabilities as appropriate. In transfers where control over the asset is retained, the Group continues to recognise the asset to the extent of its continuing involvement, determined by the extent to which it is exposed to changes in the value of the transferred asset.

The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

(H) Impairment of assets

(i) Financial assets measured at amortised costThe carrying amounts of these assets are reviewed at each reporting date to determine whether there is any objective evidence of impairment. A financial asset is considered to be impaired if objective evidence indicates that one or more events that have occurred since the initial recognition of the asset have had a negative effect on the estimated future cashflows of that asset and can be reliably estimated. Objective evidence that a financial asset or group of assets is impaired includes observable data that comes to the attention of the Group about the following events:

Significant financial difficulty of the issuer or debtor;

A breach of contract, such as a default or delinquency in payments;




It becomes probable that the issuer or debtor will enter bankruptcy or other financial reorganisation;

The disappearance of an active market for that financial asset because of financial difficulties; or

Observable data indicating that there is a measurable decrease in the estimated future cash flow from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the Group.

For financial assets measured at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant and individually or collectively for financial assets that are not individually significant. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying value and the present value of the estimated future cash flows discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under contract. The Group may measure impairment on the basis of an instrument’s fair value using an observable market price.

For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of similar credit risk characteristics. Those characteristics are relevant to the estimation of future cashflows for groups of such assets by being indicative of the issuer’s ability to pay all amounts due under the contractual terms of the debt instrument being evaluated. If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as improved credit rating), the previously recognised impairment loss is reversed by adjusting the allowance account. The amount of the reversal is recognised in the statement of profit or loss.

(ii) Assets classified as available-for-saleAvailable-for-sale financial assets are impaired if there is objective evidence of impairment, resulting from one or more loss events that occurred after initial recognition but before the reporting date, that have an impact on the future cash flows of the asset. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is an objective evidence of impairment resulting in the recognition of an impairment loss. In this respect, a decline of 20% or more is regarded as significant, and a period of 9 months or longer is considered to be prolonged. If any such quantitative evidence exists for available-for-sale financial assets, the asset is considered for impairment, taking qualitative evidence into account.




All impairment losses are recognized through profit or loss. If any loss on the financial asset was previously recognized directly in equity as a reduction in fair value, the cumulative net loss that had been recognized in equity is transferred to the income statement and is recognized as part of the impairment loss. The amount of the loss recognized in profit or loss is the difference between the acquisition cost and the current fair value, less any previously recognized impairment loss.

Subsequent decreases in the amount relating to an impairment loss, that can be linked objectively to an event occurring after the impairment loss was recognized in the income statement, is reversed through the income statement. An impairment loss in respect of an equity instrument classified as available-for-sale is not reversed through the income statement but accounted for directly in equity.

(iii) Trade receivablesTrade receivables are initially recognised at fair value and subsequently measured at amortised cost less provision for impairment. An allowance for impairment is made when there is objective evidence of impairment. One of the impairment triggers for trade receivables from brokers is the age of the debt - when the amount receivable is outstanding for more than 30 days after the reporting date. If in a subsequent period the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying value of the asset does not exceed its amortised cost at the reverse date. Any subsequent reversal of an impairment loss is recognised in the profit and loss.

(iv) Non financial assetsThe Group’s non financial assets with carrying amounts other than investment property are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For intangible assets that have indefinite useful lives or that are available for use, the recoverable amount is estimated each year at the same time.An impairment loss is recognised if the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. A cash generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in profit or loss.

The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.




Pledged assetsFinancial assets transferred to external parties that do not qualify for de-recognition are reclassified in the statement of financial position from financial assets (held-for-trading, held-to-maturity or available-for-sale) to pledged assets, if the transferee has received the right to sell or re-pledge them in the event of default from agreed terms. Initial recognition of pledged assets is at fair value, whilst subsequent measurement depends on the classification and measurement of the financial asset in accordance with IAS 39.

(I) Offsetting financial instrumentsFinancial assets and liabilities are set off and the net amount presented in the statement of financial position when, and only when, the Group has a legally enforceable right to set off the recognized amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when permitted under IFRS, or for gains and losses arising from the group of similar transactions.

(J) Reinsurance assetsThese are receivables that arise from reinsurance contracts. The details of recognition and measurement of reinsurance contracts have been set out under note c(iii) a.

(K) Deferred acquisition costsAcquisition costs comprise all direct and indirect costs arising from the origination of insurance contracts.

Deferred acquisition costs represent a portion of commission which are incurred during a financial year and are deferred to the extent that they are recoverable out of future revenue margins. It is calculated by applying the ratio of unearned premium to written premium.

(L) Other receivables and prepaymentsOther receivables are stated after deductions of amounts considered bad or doubtful of recovery. These are receivables other than investment securities, insurance trade receivables and reinsurance assets. When a debt is deemed not collectible, it is written off against the related provision or directly to profit or loss account to the extent not previously provided for. Any subsequent recovery of written-off debts is credited to profit or loss.

Prepayments represent prepaid expenses and are carried at cost less amortisation expensed in profit or loss.

(M) Leases

(i) Operating leasesLeases where the lessor retains the risks and rewards of ownership of the underlying asset are classified as operating leases. Payments made under operating leases are charged against income on a straight-line basis over the period of the lease.




(ii) Finance leasesLeases of equipment where the group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased asset or the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant interest rate on the outstanding balance of the liability.

The corresponding lease obligations, net of finance charges, are included in liabilities. The finance cost is charged to the income statement over the lease period according to the effective interest method. The equipment acquired under the finance lease is depreciated over the shorter of the useful life of the asset and the lease term, if ownership does not pass at the end of the lease term. Leased assets under finance leases are treated in the same manner as property and equipment.

(N) Investment propertiesInvestment property comprises investment in land or buildings held primarily to earn rentals or capital appreciation or both.

Investment property is initially recognized at cost including transaction costs The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met; and excludes cost of day to day servicing of an investment property. An investment property is subsequently measured at fair value with any change therein recognised in profit or loss. Fair values are determined individually, on a basis appropriate to the purpose for which the property is intended and with regard to recent market transactions for similar properties in the same location.

Fair values are reviewed annually by independent valuer, holding a recognized and relevant professional qualification and with relevant experience in the location and category of investment property being valued. Any gain and loss arising from a change in the fair value is recognized in the income statement.Subsequent expenditure on investment property is capitalized only if future economic benefit will flow to the Group; otherwise they are expensed as incurred

.Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognized in profit or loss. When an investment property that was previously classified as property and equipment is sold, any related amount included in the valuation reserve is transferred to retained earnings.

Investment properties are disclosed separate from the property and equipment used for the purposes of the business.

The Group separately accounts for a dual purpose property as investment property if it occupies only an insignificant portion. Otherwise, the portion occupied by the Group is treated as property plant and equipment.




(O) Intangible assets

SoftwareRecognition of software acquired is only allowed if it is probable that future economic benefits to this intangible asset are attributable and will flow to the Group.

Software acquired is initially measured at cost. The cost of acquired software comprises its purchase price, including any import duties and non-refundable purchase taxes, and any directly attributable expenditure on preparing the asset for its intended use. After initial recognition, software acquired is carried at its cost less any accumulated amortisation and any accumulated impairment losses. Maintenance costs should not be included.

Subsequent expenditure on software assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred. Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful life of the software, from the date that it is available for use. The estimated useful life of software is three years, subject to annual reassessment.Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(P) Property and equipment

(i) Initial recognition Property and equipment comprise land, buildings and other properties owned by the Group.

Items of property and equipment are initially recognized at cost. Cost includes expenditure that is directly attributable to the acquisition of the assets.

(ii) Subsequent costsSubsequent costs on replacement parts on an item of property are recognized in the carrying amount of the asset and the carrying amount of the replaced or renewed component is derecognized.

(iii) Subsequent measurementAll items of property and equipment except land and buildings are subsequently measured at cost less accumulated depreciation and impairment losses.

Land and buildings are subsequently carried at revalued amounts, being fair value at the date of revaluation less subsequent accumulated depreciation and accumulated impairment losses, if any. They are valued on an open market basis by qualified property valuers at each reporting date.

When an individual property is revalued, any increase in its carrying amount (as a result of revaluation) is transferred to a revaluation reserve, except to the extent that it reverses a revaluation decrease of the same property previously recognised as an expense in the statement of profit or loss.




When the value of an individual property is decreased as a result of a revaluation, the decrease is charged against any related credit balance in the revaluation reserve in respect of that property. However, to the extent that it exceeds any surplus, it is recognised as an expense in the statement of profit and loss.

(iv) DepreciationDepreciation is calculated on property and equipment on the straight line basis to write down the cost of each asset to its residual value over its estimated useful life. Depreciation methods, useful lives and residual values are reassessed at each reporting date. No depreciation is charged on property and equipment’s until they are brought into use.

Depreciation reduces an asset’s carrying value to its residual value at the end of its useful life, and is allocated on a straight line basis over the estimated useful lives, as follows:

Leasehold land - Over the shorter of the useful life or lease term

Building & Leasehold Improvements - 50 yearsOffice equipment - 5 yearsComputer hardware - 3 yearsFurniture and fittings - 5 yearsMotor vehicles - 4 years

Depreciation methods, useful lives and residual values are reassessed at each reporting date and adjusted if appropriate.

(v) De-recognition

Upon disposal of any item of property and equipment or when no future economic benefits are expected to flow from its use, such items are derecognized from the books. Gains and losses on disposal of assets are determined by comparing the net proceeds with their carrying amounts and are recognized in profit or loss in the year of de-recognition.

(Q) Statutory depositThese deposits represent bank balances required by the insurance regulators of the Group to be placed with relevant central banks of Group’s operating jurisdictions. These deposits are stated at cost. Interest on statutory deposits is recognized as earned in investment income.

(R) Insurance contract - classificationThe Group enters into insurance contracts as its primary business activities. Insurance contracts are those that the Group accepts significant insurance risk from another party (the policy holder) by agreeing to compensate the policy holder or other beneficiary, if a specified uncertain future event (the insured event) adversely affects the policy holder or the other beneficiary. The Group as a guide defines significant insurance risk as the possibility of having to pay benefit on the occurrence of an insured event that are at least 10% more than the benefit payable if the insured event did not occur.




(S) Insurance contract liabilitiesThe recognition and measurement of insurance contracts have been set out under note 4q. Insurance contract liabilities are determined as follows:

Reserves for unearned premium and unexpired riskThe reserve for unearned premium is calculated on a time apportionment basis in respect of risk accepted during the year. A provision for additional unexpired risk reserve is recognised for an underwriting year where it is determined that the estimated cost of claims and expenses would exceed the unearned premium reserve.

Reserves for outstanding claimsThe reserve for outstanding claims is maintained at the total amount of outstanding claims incurred plus claims incurred but not reported (“IBNR”) as at the reporting date.The IBNR is based on the liability adequacy test.

Liability adequacy testThe net liability for insurance contracts is tested for adequacy by discounting current estimates of all future contractual cash flows and comparing this amount to the carrying value of the liability net of deferred acquisition costs. Where a shortfall is identified, an additional provision is made and the Group recognizes the deficiency in the statement of profit or loss. Insurance contract liabilities are subject to liability adequacy testing on an annual basis. The method of valuation and assumptions used, the cashflows considered and the discounting and aggregation practices adopted have been set out in the following notes.

Reserving Methodology and AssumptionsFor non-life insurance risks, the Company uses different methods to incorporate the various assumptions made in order to estimate the ultimate cost of claims. The two methods more commonly used are the Discounted Inflation-adjusted Basic Chain Ladder and the Expected Loss Ratio methods adjusted for assumed experience to date.

Claims data was grouped into triangles by accident year or quarter and payment year or quarter. The choice between quarters or years was based on the volume of data in each segment. The claims paid data was sub – divided into large and attritional claims. Large claims were projected separately as they can significantly distort patterns. Where there was insufficient claim data, large and attritional claims were projected together as removing large claims would reduce the volume of data in the triangles and compromise the credibility.

Discounted Inflation-adjusted Basic Chain Ladder method Historical claims paid were grouped into 8-year cohorts – representing when they were paid after their underwriting year. These cohorts are called claim development years and the pattern for 8 years was studied. The historical paid losses are projected to their ultimate values for each underwriting year by calculating the loss development factors for each development year. The ultimate claims are then derived using the loss development factors and the latest paid historical claims.

The historical paid losses are inflated using the corresponding inflation index in each of the accident years to the year of valuation and then accumulated to their ultimate values for each accident year to obtain the projected outstanding claims. These projected outstanding claims are then further multiplied by the future inflation index from the year




of valuation to the future year of payment of the outstanding claims.

The resulting claims estimated is discounted to the valuation date using a discount rate of 14.5% to allow for a margin of prudence.

The future claims (the ultimate claim amount less paid claims to date) are allocated to future payment periods in line with the development patterns. The outstanding claims reported to date are then subtracted from the total future claims to give the resulting IBNR figure per accident year or quarter. i.e. IBNR = Ultimate claim amount minus paid claims till date minus claims outstanding.

Assumptions underlying the Discounted Inflation-adjusted Basic Chain Ladder method

This method assumes the following:

- The future claims follow a trend pattern from the historical data- Payment patterns will be broadly similar in each accident year. Thus the

proportionate increases in the known cumulative payments from one development year to the next used to calculate the expected cumulative payments for the future development periods.

- The run off period is eight (8) years and hence the method assumes no more claims will be paid subsequently.

- That weighted past average inflation will remain unchanged into the future.

Expected Loss Ratio methodThis method is simple and gives an approximate estimate. This method was adopted as a check on the ultimate projections and also where the volume of data available is too small to be credible when using a statistical approach. Under this method, the Ultimate claims was obtained by studying the historical loss ratios, investigating any differences and using judgements to derive a loss ratio. Paid claims already emerged was then deducted for from the estimated Ultimate claims to obtain the reserves.

DiscountingNo allowance has been made for discounting as these reserves are for short term contracts, the effect of discounting is not expected to have a significant impact on the reserves.

(T) Trade payablesTrade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. The fair value of a non-interest bearing liability is its discounted repayment amount. If the due date of the liability is less than one year, discounting is omitted as the impact is not expected to be significant.

(U) Provisions and other payablesA provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Provisions are determined by discounting the expected future cash flows at the rate that reflects current market assessments of the time value of money and the risks specific to the obligation.




Other payables are recognized at carrying amounts as and when due.

(W) Current and deferred taxIncome tax comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in other comprehensive income (OCI) or equity, in which case it is recognised in OCI or equity respectively.

Current tax is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised.

Deferred tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated and separate financial statements. However, if the deferred income tax arises from initial recognition of the asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for. Deferred income tax is determined using the tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax is realisable or the deferred income tax liability is payable.

Deferred tax assets are recognised to the extent that it is possible that future profit will be available against which the temporary differences can be utilised.

Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the Group controls the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Current and deferred tax assets and liabilities are offset when there is legally enforceable right to offset current tax assets against current tax liabilities and when deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different entities where there is an intention to settle the balances on a net basis or their tax assets and liabilities will be realized simultaneously.

The tax effects of carry-forwards of unused losses or unused tax credits are recognised as an asset when it is probable that future taxable profits will be available against which these losses can be utilised.

Deferred tax related to fair value re-measurement of available-for-sale investments, which are recognized directly in other comprehensive income, is also recognized in other comprehensive income and subsequently recognised in profit or loss together with the deferred gain or loss.

Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future and




differences arising from investment property measured at fair value whose carrying amount will be recovered through use.

(X) Share capital & reserves

(I) Share capitalThe Group classifies ordinary shares and share premium as equity when there is no obligation to transfer cash or other assets.

Incremental costs directly attributable to issue of shares are recognized as deductions from equity net of any tax effects.

(ii) Dividend on ordinary sharesDividends on the Company’s ordinary shares are recognised in equity in the period in which they are paid or, if earlier, approved by the Company’s shareholders.

Dividend distribution to the Company’s shareholders is recognized as a liability in the financial statements in the period in which the dividends are approved by the Company’s shareholders. Dividends that are proposed but not yet declared are disclosed in the notes to the financial statements.

(Y) Contingency reservesIn compliance with Section 21 (2) of Insurance Act CAP I17 LFN 2004, the contingency reserve is credited with the greater of 3% of total premiums, or 20% of the net profits. This shall accumulate until it reaches an amount equal to the greater of minimum paid-up capital or 50 percent of net premium.

(Z) Retained earningsThe net profits or losses from operations in current and prior periods are accumulated in retained earnings less distributions to equity holders.

(AA) Asset revaluation reserveAsset revaluation reserve represents revaluation surplus on revalued property in use by the Company. When an individual property is revalued, any increase in its carrying amount is transferred to an asset revaluation reserve.

(AB) Fair value reserveFair value reserve represents valuation surplus on available-for-sale assets. It incorporates the cumulative net change in the fair value of available-for-sale financial assets until assets are derecognised or impaired.

(AC) Earnings per shareThe Group presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period excluding treasury shares held by the Group.




Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.”

(AD) Contingent liabilitiesA contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group or the Group has a present obligation as a result of past event which is not recognised because it is not probable that an outflow of resources will be required to settle the obligation; or the amount cannot be reliably estimated. Contingent liabilities normally comprise legal claims or court process in respect of which a liability is not likely to crystallise.

6 Critical Accounting Estimates and JudgementsThe Company makes estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates and judgements are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Critical accounting estimates and judgements have been applied as follows:

(a) The ultimate liability arising from claims made under insurance contracts The estimation of the ultimate liability arising from claims made under insurance contracts is one of the Company’s most critical accounting estimate. There are sources of uncertainty that need to be considered in the estimation of the liability that the Company will ultimately pay for such claims.

The ultimate cost of outstanding claims is estimated by using a standard actuarial claims projection techniques called the Basic Chain Ladder (BCL).

The main assumption underlying this technique is that the Company’s past claims development experience can be used to project future claims development and hence ultimate claims costs. As such, this method extrapolates the development of paid and incurred losses, average costs per claim and claim numbers based on the observed development of earlier years and expected loss ratios. Historical claims development is mainly analysed by accident years and the assumptions used are those implicit in the historical claims development data on which the projections are based. Additional qualitative judgment is used to assess the extent to which past trends may not apply in future, (for example to reflect one-off occurrences, changes in external or market factors such as public attitudes to claiming, economic conditions, levels of claims, inflation, judicial decisions and legislation, as well as internal factors such as portfolio mix, policy features and claims handling procedures) in order to arrive at the estimated ultimate cost of claims that present the likely outcome from the range of possible outcomes, taking account of all the uncertainties involved.

The carrying value at the reporting date of general insurance contract liabilities is N3.37 billion (2016: N2.45 billion). See note 39 for more details.




(b) Impairment of available-for-sale equity financial assetsThe Company determines that available-for-sale equity financial assets are impaired when there has been a significant or prolonged decline in the fair value below its cost. This determination of what is significant or prolonged requires judgement. In making this judgement, the Company evaluates among other factors, the normal volatility in share price, the financial health of the investee, industry and sector performance, changes in technology, and operational and financing cash flow. Impairment may be appropriate when there is evidence of deterioration in the financial health of the investee, industry and sector performance, changes in technology, and financing and operational cash flows.

The Company’s available-for-sale equity financial assets were assessed for impairment during the year, but no objective evidence of impairment was identified. Hence, no impairment was recognised by the Company.

(c) Fair value of financial instrumentsThe determination of fair value for financial assets and financial liabilities for which there is no observable market price requires the use of valuation techniques as described in Note 4(d)iii of the accounting policy. For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgment depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.

The Company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the requirements.

Level 1: Quoted market price in an active market for an identical instrument.

Level 2: Valuation techniques based on observable inputs. This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instruments valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

Fair values of financial assets and financial liabilities that are traded in active markets arebased on quoted market prices or dealer price quotations.

The fair value of financial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. In these cases, the fair values are estimated from observable data in respect of similar financial instruments or using models. Where market observable inputs are not available, they are estimated based on appropriate assumptions.




Models are calibrated to ensure that outputs reflect actual data and comparative market prices. To the extent practicable, models use only observable data; however, areas such as credit risk (both own credit risk and counter party risk), volatilities and correlations require management to make estimates.

Below is the analysis of financial instruments measured at fair value at the end of the reporting period, by the level in the fair value hierarchy into which the fair value measurement is categorised:

In thousands of Nigerian Naira Note Level 1 Level 2 Level 3

31 December 2017

N’000

Available-for-sale securities (Quoted equities)

25

370,167

- -

31 December 2016

Available-for-sale securities(Quoted equities) 25 262,698 - -

There were no investment securities fair- valued using either level 2 or level 3 hierarchy during the year.

(c) Fair value of unquoted equity financial instrumentsInvestments in unquoted equity financial instrument is measured at fair value, however, where the fair value cannot be reliably estimated, it is carried at cost less impairment loss.

The Company’s investment in unquoted equity financial instrument could not be fair valued as there were no observable data for which the entity could be fair valued. The carrying amount was therefore based on cost. The investment is tested for impairment using the net assets basis. Other factors such as profits from operations and returns on the investment in form of dividend received are also considered.

(d) Impairment of available-for-sale equity financial assetsThe Group determines that available-for-sale equity financial assets are impaired when there has been a significant or prolonged decline in the fair value below its cost. This determination of what is significant or prolonged requires judgment. In making this judgment, the Group evaluates among other factors, the normal volatility in share price, the financial health of the investee, industry and sector performance, changes in technology, and operational and financing cashflow. In this respect, a decline of 20% or more is regarded as significant, and a period of 9 months or longer is considered to be prolonged. If any such quantitative evidence exists for available-for-sale financial assets, the asset is considered for impairment, taking qualitative evidence into account.

(e) Impairment of trade receivables (premium debtors)The Company assesses at the end of each reporting period whether there is objective evidence that trade receivables are impaired.

The Company determines whether impairment losses are incurred if and only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the receivable (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the receivable that can be reliably estimated,




or a trigger event is identified.

Impairment estimation from 2013

On 1 January 2013, the National Insurance Commission issued the Guidelines on Insurance Premium Collection and Remittance, effective from that date. The guideline was issued to enforce adherence to Section 50 of the Insurance Act, 2003 which stipulates that all insurance covers be provided on a ‘no premium, no cover’ basis and to drive premium collection by insurers and remittance by brokers and agents.

Thus, from 2013, the only impairment trigger is payment default or delinquency in premium payments.

In line with the ‘no premium, no cover’ policy, the Company recognizes only premiums received from policy holders during the year and premiums received and receivable from brokers and agents as at the reporting date in respect of policies written during the year. However, where no premium is received from a broker or agent as at the reporting date and subsequent to the reporting date on a policy written during the year, the premium recognized on the policy is fully impaired such that the net balance on the trade receivable account represents premiums receivable as at the reporting date but received subsequent to year-end.

(f) Liabilities arising from insurance contractsLiabilities for unpaid claims are estimated on case by case basis. The reserves made for claims fluctuate based on the nature and severity of the claim reported. Claims incurred but not reported are determined using statistical analyses and the Group deems the reserves as adequate.

Sensitivity analysisSensitivity analyses are performed to test the variability around the reserves that are calculated at the best estimate level. The sensitivity analysis is done to determine how the IBNR reserve amount would change if a 75th percentile is considered as opposed to the best estimate figures included in reserve reviews as at 31 December 2017. The 75th percentile is a generally accepted level of prudency.

(g) Depreciation and carrying value of property and equipmentThe estimation of the useful lives of assets is based on management’s judgement. Any material adjustment to the estimated useful lives of items of property and equipment will have an impact on the carrying value of these items.

(h) Determination of impairment of property and equipment, and intangible assetsManagement is required to make judgements concerning the cause, timing and amount of impairment. In the identification of impairment indicators, management considers the impact of changes in current competitive conditions, cost of capital, availability of funding, technological obsolescence, discontinuance of services and other circumstances that could indicate that impairment exists. This requires management to make significant judgements and estimates concerning the existence of impairment indicators, separate cash generating units, remaining useful lives of assets, projected cash flows and net realisable values. Management’s judgement is also required when assessing whether a previously recognised impairment loss should be reversed.




(i) Income taxesThe Company is subject to income taxes in the local jurisdiction. Significant judgement is required in determining the provision for income taxes. There are many transactions for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.



Consolidated and Separate Statements of Profit or Loss and Other Comprehensive Income

For the year ended 31 December, 2017

(All amounts are in thousands of naira) Group CompanyNote 31-Dec-

201731-Dec-

201631-Dec-

201731-Dec-

2016

Gross premium written 10 2,486,736 1,929,287 2,486,736 1,929,287

Gross premium income 11 2,301,791 2,083,159 2,301,791 2,083,159Reinsurance expenses 12 (1,302,944) (1,055,959) (1,302,944) (1,055,959)

Net premium income 998,847 1,027,200 998,847 1,027,200

Commission income 13 247,916 216,601 247,916 216,601

Net underwriting income

1,246,763

1,243,801

1,246,763

1,243,801

Claims expenses (Gross)

17

1,728,905

1,234,591

1,728,905

1,234,591Claims expenses recovered from reinsurers

17

(1,436,956)

(879,376)

(1,436,956)

(879,376)Claims expenses (Net)

291,949

355,215

291,949

355,215Underwriting expenses

18

651,024

458,591

651,024

458,591

Total underwriting expenses

942,973

813,806

942,973

813,806

Underwriting profit

303,790

429,995

303,790

429,995

Investment income

14

985,446

647,725

985,446

647,725Net gains on foreign exchange translation

15(a)

54,045

630,497

54,045

630,497Net fair value gains on investment property at fair value through profit or loss

15(b)

57,000

-

57,000

-

Other operating income

16

48,057

56,404

45,877

54,439

Total investment income

1,144,548

1,334,626

1,142,368

1,332,661

Net operating income

1,448,338

1,764,621

1,446,158

1,762,656

Employee bene? t expense

19

(196,323)

(154,601)

(196,323)

(154,601)Amortization 36

(2,235)

(1,149)

(2,235)

(987)

Depreciation 37

(60,748) (47,533)

(60,748)

(47,533)Other operating expenses 20

(337,649) (251,964) (338,968) (244,417)

(596,955) (455,247) (598,274) (447,538)

Net (loss) / gains on financial instrument 21

(33,342) 181 (33,342) 181

(630,297)

(455,066)

(631,615)

(447,357)

Profit before tax

818,041

1,309,555

814,543

1,315,299

Income tax expense

22

(390,360)

(528,617)

(389,101)

(528,394)

Profit after tax for the year

427,681

780,938

425,442

786,905

Other comprehensive income

.Items that will never be reclassified to profit or loss

-

-

-

-

Items that are or may be reclassified to profit or loss

Fair value gain on revaluation of land and building

47

16,000

360,219

16,000

360,219Fair value (loss)/gain on available-for-sale financial assets

48

203,520

47,878

203,520

47,878Related tax 43(b)

-

(26,427)

-

(26,427)Other comprehensive income for the year, net of tax

219,520

381,670

219,520

381,670


647,201

1,162,609

644,962

1,168,575

Total comprehensive income attributable to the Shareholders 647,201 1,162,609 644,962 1,168,575

Earnings per share - Basic and Diluted (kobo) 23 13 24 13 24

The accompanying notes form an integral part of these financial statements.



Consolidated and Separate Statements of Financial Position As at 31 December 2017

The consolidated and separate financial statements and the accompanying notes were approved by the Board of Directors on 28 March 2018 and signed on its behalf by:

General T.Y. Danjuma (Rtd.) G.C.O.N.

John Ijerheime

Chairman

Managing Director /Chief Executive Officer FRC/2013/IODN/00000003130

FRC/2016/CIIN/00000014291

Additionally certified by:

Oluwasegun Adeoye

Chief Financial Officer

FRC/2014/ICAN/00000006841


(All amounts are in thousands of naira) Group Company

Note

31-Dec-2017

31-Dec-

2016

31-Dec-2017

31-Dec-

2016 Assets

Cash and cash equivalents

24

599,966

933,557

597,985

932,970

Financial assets:-Available-for-sale securities

25

400,667

293,198

400,667

293,198

-Held-to-maturity securities

26

6,023,847

5,915,783

6,023,847

5,915,783

-Loans and receivables

27

15,526

2,246

15,526

2,246

-Pledged assets 28

-

77,971

-

77,971

Trade receivables 29

15,431

5,624

15,431

5,624

Reinsurance assets 30

2,318,208

1,193,723

2,318,208

1,193,723

Deferred acquisition cost

31

72,189

40,619

72,189

40,619

Other receivables and prepayments

32

820,498

728,961

817,509

724,209

Investments in finance lease

33

20,154

13,491

20,154

13,490

Investment in subsidiary

34

-

-

1,000

1,000

Investment property

35

365,000

308,000

365,000

308,000

Intangible assets 36

5,156

3,374

5,156

3,374

Property and equipment

37

1,786,834

1,713,660

1,786,834

1,713,660

Statutory deposits 38

315,000

315,000

315,000

315,000

Total assets 12,758,476

11,545,207

12,754,506

11,540,867

LiabilitiesInsurance contract liabilities

39

3,372,753

2,454,980

3,372,753

2,454,980

Trade payables 40

344,795

207,442

344,795

207,442

Accruals and other payables

41

434,223

593,782

481,781

637,723

Current income tax liabilities

42

279,878

358,910

277,521

357,565

Deferred tax liabilities

43

511,693

366,159

511,693

366,157

Total liabilities 4,943,341

3,981,273

4,988,543

4,023,867

Net assets 7,815,135

7,563,934

7,765,963

7,517,000

EquityIssued and paid-up share capital

44

3,300,000

3,300,000

3,300,000

3,300,000

Contingency reserve

45

2,130,355

2,045,266

2,130,355

2,045,266

Retained earnings 46 1,037,209 1,090,616 988,037 1,043,683Asset revaluation reserve 47 1,367,088 1,351,088 1,367,088 1,351,088Fair value reserve 48 (19,517) (223,036) (19,517) (223,037)

Total equity 7,815,135 7,563,934 7,765,963 7,517,000

Total liabilities and equity 12,758,476 11,545,207 12,754,506 11,540,867



Consolidated and Separate Statements of Changes in Equity

(All amounts are in thousands of naira)

GROUP

Attributable to the equity holders of the Group

Share capital

Contingency reserve

Asset revaluation

reserveFair value

reserve Retained earnings

Total equity

At 1 January 2017

3,300,000

2,045,266

1,351,088

(223,036)

1,090,616 7,563,934

Total comprehensive income for the year:

Profit for the year

-

85,089

-

-

342,593 427,681Other comprehensive income for the year

-

-

16,000

203,520

- 219,520Tax on other comprehensive income

-

-

-


-

85,089

16,000

203,520

342,593 647,201

Transactions with owners:

Dividend to equity holders

-

-

-

-

(396,000) (396,000)

Total transactions with owners

-

-

-

-

(396,000) (396,000)

At 31 December 2017

3,300,000

2,130,355

1,367,088

(19,517)

1,037,209 7,815,135

Attributable to the equity holders of the Group

Share

capital

Contingency reserve

Asset revaluation

reserve

Fair value reserve

Retained earnings

Total equity

At 1 January 2016

3,300,000

1,887,886

1,017,296

(270,915)

1,292,058 7,226,326

Total comprehensive income for the year:

-Profit for the year

-

157,380

-

-

623,558 780,938Other comprehensive income for the year

-

-

360,218

47,879

- 408,097Tax on other comprehensive income

(26,427)

-

(26,427)


-

157,380

333,792

47,879

623,558 1,162,608


Issue of share capital

-

-

-

-

- -Transaction costs for equity issue

-

-

-

-

- -Proceeds from shares issued

-

-

-

-

- -


-

-

-

-

(825,000) (825,000)


-

-

-

-

(825,000) (825,000)

At 31 December 2016 3,300,000 2,045,266 1,351,088 (223,036) 1,090,616 7,563,934



COMPANY

Attributable to the equity holders of the Company

Share

capital

Contingency reserve

Asset

revaluation reserve

Fair value reserve

Retained earnings

Total equity

At 1 January 2017

3,300,000

2,045,266

1,351,088

(223,037)

1,043,683

7,517,000

Total comprehensive incom e for the year:

Profit for the year

-

85,088

-

-

340,354

425,442

Other comprehensive income for the year

-

-

16,000

203,520

-

219,520


-

85,088

16,000

203,520

340,354

644,962



-

-

-

-

(396,000)

(396,000)


-

-

-

-

(396,000)

(396,000)

At 31 December 2017

3,300,000

2,130,355

1,367,088

(19,517)

988,037

7,765,963

Attributable to the equity holders of the Company

Share

capital

Contingency reserve

Asset revaluation

reserve

Fair value reserve

Retained earnings

Total equity

At 1 January 2016

3,300,000

1,887,886

1,017,296

(270,915)

1,239,158 7,173,425

Total comprehensive income for the year: Profit for the year - 157,380 - - 629,525 786,905

Other comprehensive income for the year -

-

360,218

47,879

- 408,097

Tax on other comprehensive income - -

(26,427) -

- (26,427)


-

157,380

333,792

47,879

629,525 1,168,575

Transactions with owners: Dividend to equity holders

-

-

-

-

(825,000)

(825,000)Total transactions with owners - - - - (825,000) (825,000)

At 31 December 2016 3,300,000 2,045,266 1,351,088 (223,036) 1,043,683 7,517,000


Consolidated and Separate Statements of Changes in Equity



Consolidated and Separate Statements of Cash Flows

(All amounts are in thousands of naira) Group Company

Note31-Dec-

2017 31-Dec-

2016 31-Dec-

2017 31-Dec-

2016 Cash flows from operating activitiesCash premium received 10,29

2,476,929 1,927,881 2,476,929 1,927,881

Reinsurance payments

12,30,40

(1,297,304)

(1,127,918)

(1,297,304)

(1,127,918)Claims paid 17

(996,078)

(1,077,605)

(996,078)

(1,077,605)Reinsurance claim recoveries

17,30

443,770

661,876

443,770

661,876Commission paid

18

(394,332)

(249,933)

(394,332)

(249,933)

Commission received

13

299,761

216,601

299,761

216,601

Cash payment to and on behalf of employees

18,19

(524,252) (370,903)

(524,252)

(370,903)

Interest received

14

125,397

623,594 125,397

623,594

Dividend income on available-for-sale securities

14

17,915

32,105

17,915

32,105

Other income

14,16

23,092

54,850

20,912

52,885Other operating cash payments

(407,289) 28,775 (406,750) 30,098

Cash generated from operations (232,391) 719,323 (234,032) 718,681

Income tax paid 42

(323,857) (336,527) (323,609) (335,177)Net cash generated from operating activities (556,247) 382,796 (557,641) 383,504

Cash flows from investing activities Investment securities 26

797,242 (543,097) 797,242 (543,097)

Purchase of intangible assets

36

(4,017)

(3,193)

(4,017)

(3,193)

Purchase of property and equipment

37

(117,921)

(80,122)

(117,921)

(80,122)

Proceeds from the sale of property and equipment

16

3,015

1,554

3,015

1,554

Pledged Asset

28

77,971

9,194

77,971

9,194

Net cash from /(used in) from investing activities

756,290

(615,666)

756,290

(615,666)

Cash flows from financing activities

Dividends paid to owners

41,46

(587,680)

(825,000)

(587,680)

(825,000)

Net cash used in financing activities

(587,680)

(825,000)

(587,680)

(825,000)

Net (decrease) in cash and cash equivalents

(387,636)

(1,057,870)

(389,030)

(1,057,161)Cash and cash equivalents at beginning of year 933,557 1,360,933 932,970 1,359,637Effect of exchange difference on cash and cash equivalents

15a54,045 630,494 54,045 630,497

Cash and cash equivalents at end of year 24 599,966 933,557 597,985 932,970

Notes to the Consolidated and Separate Financial Statements



7 Saham Unitrust’s Risk Management FrameworkThe primary objective of Saham Unitrust’s enterprise risk management framework is to protect the Company’s stakeholders from events that hinder the sustainable achievement of financial performance objectives, including failing to exploit opportunities. Key management recognises the critical importance of having efficient and effective risk management systems in place.

The Company has established a risk management function with clear terms of reference from the Board of Directors and the Executive Management Committees. This is supplemented with a clear organizational structure with documented delegated authorities and responsibilities from the Board of Directors to Executive Management Committees and Senior Managers. The Internal Audit unit provides independent and objective assurance on the robustness of the risk management framework, and the appropriateness and effectiveness of internal controls.

The Board of Directors approves the Company’s risk management policies and meets regularly to approve any commercial, regulatory and organizational requirements of such policies. These policies define the Company’s identification of risk and its interpretation, limit structure to ensure the appropriate quality and diversification of assets, align underwriting and reinsurance strategy to the corporate goals, and specify reporting requirements.

Internal Audit and Risk Management SystemsAs an insurance company, the management of risk is at the core of the operating structure of Unitrust Insurance Company Limited. As a result, the Company employs the best risk management practices to identify, measure, monitor, control and report every material risk prevalent in its business operation.

The Company’s ERM framework is in line with Committee of Sponsoring Organizations of the Treadway Commission (COSO) as approved by the insurance industry regulator, National Insurance Commission (NAICOM), to identify, assess, manage and monitor the risks inherent in our operations.

The risk structure includes the Company’s approach to management of risks inherent in the business and its appetite for these risk exposures. Under this approach, the Company’s top risks are continuously assessed and the risk profile monitored against approved limits. The main strategies for managing and mitigating risk include policies and tools that target specific broad risk categories.

The Internal Audit function is an independent appraisal activity, established by management to conduct reviews and investigations into manual and computer operations and management systems and report findings and recommendations to management for guidance and decision-making.

The mission of Internal Audit is to provide independent appraisal of all activities of the Company with the aim of adding value, improve operational efficiency, business effectiveness, risk management and ensure that effective controls are in place. The Internal Control Unit provides management with assurance that the controls which govern the Company’s activities, computer systems and operations are properly conceived and are being effectively administered.




The major objective of the Internal Audit Unit is to examine and evaluate whether the Company’s framework for risk management, control, and corporate governance processes are adequate and functional while also advising the Executive Management and the Audit Committee on areas of improvement in internal control and risk management systems.

The Board has adopted a holistic and integrated approach to internal control, governance, risk management and compliance framework. This allows for a mutual and well-coordinated approach to managing underwriting, operational, investments, credit, liquidity, and legal/regulatory risks.

In carrying out its duties, the Internal Control Unit has full and unrestricted access to all of the Company’s activities, records, and computer systems necessary for the execution of the agreed audit plans. It regularly reviews internal control measures and builds necessary checks and balances through the development of procedures or policies in line with the dictates of events within and outside the Company.

The Internal Control function of the Company is currently conducted on a risk-based approach which focuses on risk as its objectives. This is aimed at providing, on a continuous basis, an independent assurance to the Board that:

- the risk management processes which management has put in place within the Company are sound and operating as intended.

- the responses which management has made to risks which they wish to address are both adequate and effective in reducing those risks to a level acceptable to the Board.

- there is a process in place of reducing potential loss due to risks to an acceptable level while maximising returns from opportunities.

- there is a process in place to help management direct resources to the best opportunities that can create maximum returns with minimum risk while promoting continuous improvement.

Enterprise-wide Risk Management PrinciplesTo ensure effective integration over time into organization processes so that risk management not only protects value but creates value, the Company is guided by the following principles:

- the Company will not take any action that will compromise its integrity. It shall identify, measure, manage, control and report as practical as possible all risks.

- the Company will at all times comply with all government regulations and uphold international best practice.

- the Company will build and entrench an enduring risk culture, which shall pervade the entire organization.

- the Company will only accept risks that fall within its risk acceptance criteria and have commensurate returns and continually review its activities to determine inherent risks level and adopt appropriate risk response at all times.




- the Company will make decisions based on careful analysis of the implications of such risk to its strategic goals and operating environment.

Enterprise-wide Risk Management FrameworkThis framework is developed to promote a strong risk management culture and integrate risk considerations into management and decision-making processes through a robust risk governance structure. It ensures that top risks are properly identified,analysed and assessed, in a consistent manner across the organization.

ERM Governance Structure

Board Risk Management and Audit Committee

The Board sets the organization’s risk appetite, approves the strategy for managing risk and is ultimately responsible for the organization’s system of internal control. This function is carried out via its Board Risk Management Committee as follows:

- Assist in the oversight of the review and approval of the company’s risk management policy including risk appetite and risk strategy;

- Review the adequacy and effectiveness of risk management and controls;- Oversee management’s process for the identification of significant risks across the

company and the adequacy of prevention, detection and reporting mechanisms;- Review of the company’s compliance level with applicable laws and regulatory

requirements that may impact the company’s risk profile;- Review changes in the economic and business environment, including emerging trends

and other factors relevant to the Company’s risk profile;- Review large underwritten risks for adequacy of reinsurance and other risk management

techniques including environmental & social management system; and

Notes to the Consolidated and Separate Financial Statements Cont’d



- Oversight of enterprise risk management

The Management Risk Committee (MRC) of the Company recommends to the Board Risk Management Committee of the Board an amount at risk that it is prudent for the risk committee to approve in line with the company’s business strategies. The Board Risk Management Committee approve the Company’s risk appetite each year, based on a well-defined and broad set of risk measures.

MRC is also responsible for establishing, documenting, and enforcing all policies that involve risk. It has the oversight role of ensuring that the business units adhere to the Board’s risk directive. The Committee review risk reports from the Risk Management department bi-monthly.

The Chief Risk Officer (CRO) plays a pivotal role in informing the Board, as well as MRC about the risk profile of the Company and also communicates the views of the Board and Senior Management down the Company. The CRO is also responsible for the following:

- Risk identification - locate and properly describe the risks that the business faces.- Risk analysis - determine the likelihood of identified risks crystallising and the impact

on the Company’s finances or operation should they crystallise.- Risk evaluation - determine risk significance (high, medium, low) of analysed risks by

ranking them with Board approved risk likelihood and impact benchmark standards.- Design control measures that will terminate evaluated risk or tame it to a tolerance level

in a cost beneficial manner.- Conduct risk assessment (by way of workshops or other methods) in order to identify,

analyse, evaluate risks and design risk control measures.- Maintenance of the risk registers and compliance register for all applicable laws and

regulations.- Analyse and investigate control failures, incidents and near misses and report to the

Management Risk Committee whether remedial/mitigating controls need to be implemented.

- Design, document, and review, from time-to-time, Board approved policy and the standard operating procedures for every unit of the business.

- Document and implement a business continuity plan.

The Enterprise-wide risk management function which reports to the CRO, is in charge of identifying, evaluating, monitoring and recommending risk management solutions for the broad risk categories.

The internal audit functions evaluate the design and conceptual soundness of risk measures, accuracy of risk models, soundness of elements of the risk management information systems, adequacy and effectiveness of the procedures for monitoring risk, the progress of plans to upgrade risk management systems, the adequacy and effectiveness of application controls within the risk management information system, and the reliability of the vetting processes.

Risk OwnershipThe primary responsibility for the management of all risks is that of the executive management of the Company. Accordingly, management and staff shall take ownership of all risks, at appropriate levels, and shall have the responsibility to implement the risk control measures that are approved by the Board.




Risk AppetiteThe Company recognizes that its long-term sustainability is dependent upon the protection of its reputation, preservation of value and relationship with customers. To this end, the Company will not accept risks that materially impair reputation and value and requires that customers are always treated with integrity. The Company’s risk appetite is defined by a clear risk strategy and limit structure. Close risk monitoring and reporting allows for detection of potential deviations from the risk tolerance limit at an early stage at both the Group and operating entity levels.

The risk appetite states how much of the Company’s shareholder’s funds, embedded value and, forecast earnings the Company is prepared to risk in the process of adding value and attaining its objectives.

It is stated both in quantitative and qualitative terms in order to fully protect its numbers, reputation, values and culture. It aims to ensure that the Company has adequate capital in the event of extreme claim events. It also aims to have good management that can steer the affairs of the enterprise – underwriting, expense levels and good investment returns.

The Company adopts the following three (3) risk appetite matrices in establishing its minimum risk capital need:

-Capital at Risk (CaR) - No more than 15% of shareholders’ funds will be at risk in extremely stressful circumstances represented by a 99% confidence level over a one-year time horizon.

- Embedded Value at Risk (EVaR) - No more than 15% the company’s EV will be at risk over a 12-month time horizon with a 99% CI.

- Earnings at Risk (EaR) - Earnings at risk will be no more than 20% the forecast over the

Risk Appetite Statement

CaR

EVaR

EaR

Confidence Interval

99%

99%

90%

Statement

Maximum of 15% shareholder’s funds will be at risk in an extreme situation (1 : 100yrs)

Maximum of 15% EV will be at risk in extreme situations (1 : 100yrs)

Maximum of 20% of forecast earnings in moderate (1 –

10years) situation

Implication

Company risk profile has to adhere to risk statement.

Economic Capital limited to 15% of issued Capital. This also means that even at the extreme, the company’s actual capital will at least equal 240% of the Economic Capital.

The company needs to realistically forecast earnings especially technical reserves. Operations need to be closely monitored to ensure that projected cash commitments are met inclusive of dividend policy.




These high level statements will be cascaded down through the business units to reflect tolerance limits.

Risk Tolerance Limits (RTL)The Risk Tolerance Limit is a limit set by the Board. It represents a threshold above which the Board believes the strategic objectives of the company can be jeopardized. It is qualitatively and quantitatively determined. The Company has a low Risk Tolerance Limit and the qualitative limits are defined as risks that have high financial impacts if they occur together with a medium likelihood of occurrence. Special attention is paid to the control of risks that fall into this category and the quarterly risk report highlights these high level risks

Risks AssessmentThe consequences of risks actually occurring and current control measures in place to mitigate them are discussed at the risk assessment workshop and documented in the risk register.

The likelihood and impact of each identified potential risk is ranked according to the benchmarks tabulated below – these are reviewable and will typically be outcomes of employee workshops – this participation helps develop risk awareness throughout the Company.

Likelihood

Likelihood

Probability Criteria

Timescale Criteria

AllocatedScore

Unlikely

<25%

4 years or more

1

Likely 25% -

50%

2 -

4 years

2

May Occur

50% -

80%

I year or less

3

Almost Certain

80%+

Weeks or Months

4

Impact/Severity

Impact/ Severity

Financial Impact (? )

Non-

Financial Impact

Allocated Score

Very Low

Up to 2.5m

Regulator unconcerned

1

Low 2.5m -

7.5m

Advise regulator as courtesy.

2

Medium 7.5m -

15m

Notify regulator. Possible sanction.

3

High 15m -

30m

Likely sanction, censure or fine by regulator.

4

Very High Over 30mSuspension or removal of trading authorization by regulator possible.

5

Independent Review ProcessIn order to avoid the cost and risk of regulatory findings, independent review of the ERM framework shall be done by an external consultant/firm every three years or more frequently as and when required. The consultant/firm that the Company shall engage will conduct a systemic, detail oriented test of the framework. The independent review shall make recommendations that will bridge any existing gaps in compliance and technology.




Risk Control ProcessRisk control processes are identified and discussed in the quarterly risk report and Management Risk Committee meetings. Control processes are also regularly reviewed at Business Unit level and changes agreed with the Risk Officer.

Risk CategorizationThe Company is exposed to an array of risks through its operations. The Company has identified, assessed and categorized its exposure to these risks under four broad headings:

(i) Strategic risks – This specifically focuses on the economic environment, the products offered and the market.The strategic risks arise from the Company’s inability to make appropriate decisions or implement appropriate business plans, strategies, decision making, resource allocation and to adapt to changes in its business environment.

(ii) Insurance risks – These are risks associated with providing insurance products and services.

(iii) Financial risks – These are risks associated with the financial operation of the company, including capital management, investments, liquidity and credit.

(iv) Operational risks – These are risks associated with inadequate or failed internal processes, people and systems, or from external events.

(A) Strategic risksCapital management policies, objectives and approach

The Company has established the following capital management objectives, policies and approach to managing the risks that affect its capital position:

- To maintain the required level of financial stability thereby providing a degree of security to policyholders

- To allocate capital efficiently and support the development of business by ensuring that returns on capital employed meet the requirements of its capital providers and of its shareholders

- To retain financial flexibility by maintaining strong liquidity and access to a range of capital markets

- To align the profile of assets and liabilities taking account of risks inherent in the business- To maintain financial strength to support new business growth and to satisfy the

requirements of the policyholders, regulators and stakeholders- To maintain strong credit ratings and healthy capital ratios in order to support its business

objectives and maximise shareholders value.

The Company’s operations are also subject to regulatory requirements within the jurisdictions in which it operates. The minimum paid up capital requirement as specified by National Insurance Commission (NAICOM) for non-life insurance business is N3 billion. Insurers are also mandated to maintain 10% of this paid up capital with the Central Bank as Statutory Deposit. In addition, quarterly and annual returns must be submitted to NAICOM on a regular basis.

The regulations prescribed by NAICOM prescribe approval and monitoring of activities, and impose certain restrictive provisions (e.g. solvency margin) to minimise the risk of default and insolvency on the part of the insurance companies to meet unforeseen liabilities as these arise.




The Company has met all of these requirements throughout the financial year. In reporting the Company’s solvency status, solvency margin is computed using the rules prescribed by the National Insurance Commission (NAICOM). The margin of solvency, according to NAICOM is defined as total admissible assets less total liabilities. This shall not be less than either 15% of net premium or the minimum paid up share capital, whichever is higher.

The solvency margin test compares insurers’ capital against the risk profile and NAICOM expect non-life insurers to comply with this capital adequacy requirement. The regulator has the authority to request more extensive reporting and can place restrictions on the Company’s operations as deemed necessary if the Company falls below this requirement. The Company’s capital management policy for its insurance and non–insurance business is to hold sufficient capital to cover the statutory requirements based on the NAICOM regulations, including any additional amounts required by the regulators.

The solvency margin for the Company is as follows:2017 2016

?'000 ? '000 ? '000 ? '000Admissible AssetsCash and cash equivalents 595,475 932,950

Financial assets:- Available for sale 400,667 293,198- Held to Maturity 5,394,113 5,188,312- Loans and receivables 15,526 2,246

Trade receivables 15,431 5,624Reinsurance assets

2,318,208

1,193,723

Deferred acquisition costs

72,189

40,619

Investments in finance lease

20,154

13,491

Investment in subsidiary

1,000

1,000

Investment property

365,000

308,000

Land and building

1,600,000

1,600,000

Other property, plant and equipment

186,834

113,660

Statutory Deposits

315,000

315,000

Total admissible assets

11,299,597

10,007,823

Less: Admissible liabilities

Insurance contract liabilities

3,372,753

2,454,980

Trade payables

344,795

207,422

Accruals and other payables

481,781

637,723

Taxation

277,521

357,565

Total admissible liabilities

4,476,850

3,657,710

Excess of Assets (Admissible assets) over Liabilities -

Solvency Margin 6,822,747

6,350,112

Higher of:


2,486,736

2,456,292

Less: Reinsurance paid during the year (1,302,944)

(1,182,135)

Net premium

1,183,792

1,274,157

15% of Net premium

177,569

191,124

or

Minimum paid-up capital

3,000,000

3,000,000

The higher thereof:

3,000,000

3,000,000

Surplus of Solvency Margin over statutory minimum 3,822,747

3,350,112

Solvency ratio

227%

212%




The company’s solvency margin of N6,822,747(2016: N6,350,113) is above the minimum capital of N3,000,000,000 (2016: N3,000,000,000) prescribed by Section 24 of the Insurance Act 2003.

Approach to capital managementSaham Unitrust Insurance Nig.Limited seeks to optimise the structure and sources of capital to ensure that it consistently maximises returns to the shareholders and policyholders.

The Company’s approach to managing capital involves managing assets, liabilities and risks in a coordinated way, assessing shortfalls between reported and required capital level on a regular basis and taking appropriate actions to influence the capital position of the Company in the light of changes in economic conditions and risk characteristics. An important aspect of the Company’s overall capital management process is the setting of target risk adjusted rates of return, which are aligned to performance objectives and ensure that the Company is focused on the creation of value for shareholders.

The Company’s primary source of capital used is equity shareholders’ funds. The Company also utilises, where efficient to do so, sources of capital such as reinsurance in addition to more traditional sources of funding.

The capital requirements are routinely forecast on a periodic basis and assessed against both the forecast available capital and the expected internal rate of return, including risk and sensitivity analyses. The process is ultimately subject to approval by the Board.

The Company has developed a framework to identify the risks and quantify their impact on the economic capital. The framework estimates how much capital is required to reduce the risk of insolvency to a remote degree of probability. The framework has also been considered in assessing the capital requirement.

There havebeen no significant changes in its policies and processes to its capital structure.

(B) Insurance risksThe risk under insurance contract is the possibility that the insured event occurs and the uncertainty of the amount of the resulting claim. By the very nature of an insurance contract, this risk is random and therefore unpredictable.

The principal risk the Company faces under insurance contracts is that the actual claims and benefit payments or the timing thereof, differ from expectations. This is influenced by the frequency of claims, severity of claims, actual benefits paid and subsequent development of long–term claims. Therefore, the objective of the Company is to ensure that sufficient reserves are available to cover these liabilities.

The risk exposure is mitigated by diversification across a large portfolio of insurance contracts. The variability of risks is also improved by careful selection and implementation of underwriting strategy guidelines, as well as the use of reinsurance arrangements.

The Company cedes out its risk to reinsurers as part of its risk mitigation programme. Business ceded for reinsurance is placed on a proportional and non–proportional basis. The majority of proportional reinsurance is quota–share reinsurance which is taken out, on original terms basis, to reduce the overall exposure of the Company to certain classes of business. Non–proportional reinsurance is primarily excess–of–loss reinsurance designed to mitigate the company’s net




exposure to large losses. Retention limits for the excess–of–loss reinsurance vary by product line.

Amounts recoverable from reinsurers are estimated in a manner consistent with the outstanding claims provision and are in accordance with the reinsurance contracts. Although the Company has reinsurance arrangements, it is not relieved of its direct credit obligations to its policyholders and thus a credit exposure exists with respect to ceded insurance, to the extent that any reinsurer is unable to meet its obligations assumed under such reinsurance agreements.

The Company’s placement of reinsurance is diversified such that it is neither dependent on a single reinsurer nor are the operations of the Company substantially dependent upon any single reinsurance contract.

Non-life insurance contractsThe Company principally issues the following types of general insurance contracts: fire, motor, general accidents, marine, bond, engineering, workmen compensation and special risks. Risks under non–life insurance policies usually cover twelve months duration.

For general insurance contracts, the most significant risks arise from accidents. These risks do not vary significantly in relation to the location of the risk insured by the Company, type of risk insured and by industry. The risk exposure is mitigated by diversification across a large portfolio of insurance contracts.

(a) Frequency and severity of claimsThe frequency and severity of claims can be affected by several factors. The most significant are the increasing level of awards for the damages suffered as a result of accidents. The Company manages these risks through its underwriting strategy, adequate reinsurance arrangements and proactive claims handling.

Underwriting limits are in place to enforce appropriate risk selection criteria. For example, the Company has the right not to renew individual policies, it can impose excess or deductibles and it has the right to reject the payment of a fraudulent claim. Insurance contracts also entitle the Company to pursue third parties for payment of some or all costs.

The reinsurance arrangements include excess and proportional coverage. The effect of such reinsurance arrangements is that the Company should not suffer total net insurance losses in any one year.

The Company has a specialized claims unit that ensures mitigation of the risks surrounding all known claims. This unit investigates and adjusts all claims in conjunction with appointed loss adjusters. The Company actively manages and pursues early settlements of claims to reduce its exposure to unpredictable developments.

Management assesses risk concentration per class of business. The concentration of insurance risk before and after reinsurance by class in relation to the type of insurance risk accepted is summarized below, with reference to the carrying amount of the insurance liabilities (gross and net of reinsurance) arising from non-life insurance.




Year ended 31 December 2017

Product

Gross sum insured

Reinsurance sum insured

Net sum insured

N

N

N

Fire

888,254,452,967

776,180,293,946

112,074,159,021

General Accident

246,072,205,638

119,459,226,585

126,612,979,054

Marine

56,593,115,530

31,955,808,006

24,637,307,524

Engineering

235,086,478,332

168,129,147,647

66,957,330,685

Bond

3,378,856,816

1,462,253,971

1,916,602,845

Special risk

492,996,560,785

479,585,461,675

13,411,099,110

Total

1,922,381,670,068

1,576,772,191,829

345,609,478,238

Year ended 31 December 2016

Product

Gross sum insured

Reinsurance sum insured

Net sum insured

N

N

N

Fire

685,769,536,816

576,561,331,832

109,208,204,984

General Accident

144,833,452,313

55,569,810,852

89,263,641,460

Marine

85,676,739,998

64,975,795,297

20,700,944,702

Engineering

167,081,984,404

117,256,774,751

49,825,209,652

Bond

1,894,490,978

839,233,653

1,055,257,325

Special risk

150,339,706,024

146,189,549,172

4,150,156,851

Total

1,235,595,910,535

961,392,495,557

274,203,414,978

Motor and miscellaneous classes of business operate under the 'excesagreement. The details of the retention are as shown below:

s of loss' treaty

Excess of loss treaty agreement:

2017

2016

Saham Unitrust priority

10,000,000 10,000,000

1st Layer

Excess of 15,000,000 Excess of 15,000,000 2nd Layer

Excess of 25,000,000 Excess of 25,000,000 3rd Layer

Excess of 50,000,000 Excess of 50,000,000 4th Layer (Third party liability only)

NIL NIL

(b) Sources of uncertainty in the estimation of future claim paymentsClaims on non-life insurance contracts are payable on a claims-occurrence basis. The Company is liable for all insured events that occurred during the term of the contract. There are several variables that affect the amount and timing of cash flows from these contracts. These mainly relate to the inherent risks of the business activities carried out by individual contract holders and the risk management procedures they adopted.

The estimated cost of claims includes direct expenses to be incurred in settling claims, net of the expected subrogation value and other recoveries. The Company takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures. However, given the uncertainty in establishing claims provisions, it is likely that the final outcome will prove to be different from the original liability established.




The reserves held for these contracts comprises a provision for IBNR, a provision for reported claims not yet paid and a provision for unearned premiums and unexpired risks at the end of the reporting period.

(c) Process used to decide on assumptionsFor non-life insurance risks, the Company uses different methods to incorporate the various assumptions made in order to estimate the ultimate cost of claims. The two methods more commonly used are the Discounted Inflation-adjusted Basic Chain Ladder and the Expected Loss Ratio methods adjusted for assumed experience to date.

Claims data was grouped into triangles by accident year or quarter and payment year or quarter. The choice between quarters or years was based on the volume of data in each segment. The claims paid data was sub – divided into large and attritional claims. Large claims were projected separately as they can significantly distort patterns. Where there was insufficient claim data, large and attritional claims were projected together as removing large claims would reduce the volume of data in the triangles and compromise the credibility.

Discounted Inflation-adjusted Basic Chain Ladder method Historical claims paid were grouped into 8 years cohorts – representing when they were paid after their underwriting year. These cohorts are called claim development years and the patterns for 8 years was studied. The historical paid claims are projected to their ultimate values for each underwriting year by calculating the loss development factors for each development year. The ultimate claims are then derived using the loss development factors and the latest paid historical claims.

The historical paid claims are inflated using the corresponding inflation index in each of the accident years to the year of valuation and then accumulated to their ultimate values for each accident year to obtain the projected outstanding claims. These projected outstanding claims are then further multiplied by the future inflation index from the year of valuation to the future year of payment of the outstanding claims.The resulting claims estimated is discounted to the valuation date using a discount rate of 10% to allow for a margin of prudence.

The future claims (the ultimate claim amount less paid claims to date) are allocated to future payment periods in line with the development patterns. The outstanding claims reported to date are then subtracted from the total future claims to give the resulting IBNR figure per accident year or quarter. i.e. IBNR = Ultimate claim amount minus paid claims till date minus claims outstanding.

Assumptions underlying the Discounted Inflation-adjusted Basic Chain Ladder method This method assumes the following:

- The future claims follow a trend pattern from the historical data- Payment patterns will be broadly similar in each accident year. Thus the proportionate increases

in the known cumulative payments from one development year to the next used to calculate the expected cumulative payments for the future development periods.

- The run off period is eight (8) years and hence the method assumes no more claims will be paid after this.

- That weighted past average inflation will remain unchanged into the future




Expected Loss Ratio methodThis model assumes that the average delay in the payment of claims will continue into the future. Additionally, an estimate of the average ultimate loss ratio was assumed. The estimated average loss ratio was based on claims experience at the reporting date for accident years 2010, 2011, 2012, 2013, 2014 and 2015. For 3 of the classes of business namely Miscellaneous, Bond and Oil & gas, there was limited data. A Discounted Inflation-adjusted Basic Chain Ladder method was therefore inappropriate. The reserve was calculated as the expected average ultimate loss ratio for the assumed average delay period multiplied by earned premium for the assumed delay period minus current experience to the reporting date relating to the accident months that the delay affects.Unearned premium provision was calculated using a time – apportionment basis. The same approach was taken for deferred acquisition cost for the calculation of the UPR balance.

Reinsurance agreementsFor IFRS compliance purposes, all reserves are reported gross of reinsurance, with the value of the reinsurance asset calculated and reported separately.

Claims development tablesThe development of insurance liabilities provides a measure of the Company’s ability to estimate the ultimate value of claims. The summary of claims development history of the Company at the reporting date was as follows:

Claims Paid Triangulations as at 31 December 2017

FIRE Incremental Chain ladder - Yearly Projections ( N’000)-

Accident year 1 2 3 4 5 6 7 8 9 1062,797 46,473 1,319 74 94 - - - - -37,939 51,951 733 33 - - - - - -42,966 24,488 881 4,361 - 1,000 - - - -41,434 21,255 13 84 - - - - - -82,103 70,772 6,260 1,638 - - - - - -89,255 37,272 3,761 1,258 - - - - - -61,298 37,760 - - - - - - - -18,238 28,072 248 1,367 - - - - - -17,617 4,310 347 - - - - - - -25,137 39,145 - - - - - - - -74,503 - - - - - - - - -

FIRE -

Cumulative Chain ladder- Annual Projections ( N’000) Accident year 1 2

3

4

5

6

7

8

9

102007 199,239 327,343

330,534

330,694

330,878

330,878

330,878

330,878

330,878 330,8782008 104,578 230,305

20072008200920102011201220132014201520162017

231,892

231,956

231,956

231,956

231,956

231,956

231,956 231,9562009 103,983 156,991

158,720

166,362

166,362

167,860

167,860

167,860

167,860 167,8602010 89,692 131,405

131,428

131,565

131,565

131,565

131,565

131,565

131,684 131,6842011 161,131 285,144

295,301

297,754

297,754

297,754

297,754

298,122

298,122 298,1222012 156,399 216,871

222,505

224,225

224,225

224,225

225,210

225,210

225,210 225,2102013 99,454 156,023

156,023

156,023

156,023

156,611

156,611

156,611

156,611 156,6112014 27,323 65,695

65,981

67,348

67,844

67,850

67,850

67,850

67,850 67,8502015 24,081 29,054

29,401

32,677

32,682

32,685

32,685

32,685

32,685 32,6852016 29,000 68,145

118,277

119,534

119,554

119,566

119,566

119,566

119,566 119,5662017 74,503 133,976

136,373

138,029

138,056

138,072

138,072

138,072

138,072 138,072

Yearly Projections (

Accident year 1 2

3

4

5

6

7

8

9

102007 32,662 17,808

17,590

12,998

5,552

1,364

1,168

-

- -2008 12,819 64,931

31,547

5,563

3,539

5,799

-

-

- -2009 70,006 85,476

27,579

6,008

6,166

-

3,365

891

- -2010 81,454 59,185

16,494

17,707 1,224

25

34 785

- -2011 62,863 68,876

34,213

3,041

486

2,223

-

-

- -2012 71,130 78,363

1,947

324

1,667

989

-

-

- -2013 58,445 16,120

7,447

698

2,345

-

-

-

- -2014 15,206 7,177

1,581

1,953

-

-

-

-

- -2015 25,344 30,475

15,322

-

-

-

-

-

- -2016 66,776 45,767

-

-

-

-

-

-

- -2017 29,735 - - - - - - - - -

General Accident - Incremental Chain ladder- N’000)




General Accident - Cumulative Chain ladder-Annual Projections (N’000)1 2 3 4 5 6 7 8 9 10

103,628 152,717 195,287 223,424 234,321 236,711 238,606 238,606 238,606 238,60635,336 192,477 260,767 271,684 277,885 287,294 287,294 287,294 287,294 287,294

169,423 354,451 408,577 419,105 429,108 429,108 433,708 434,737 434,737 441,340176,323 292,476 321,377 350,107 351,941 351,975 352,015 352,800 361,062 361,062123,370 244,059 299,570 304,126 304,791 307,355 307,355 319,448 319,448 319,448124,639 251,780 254,697 255,140 257,063 258,052 266,621 267,106 267,106 267,106

94,825

118,974

129,154

129,959

132,304

140,294

141,040

141,334 141,334 141,33422,780

32,591

34,415

36,368

47,843

48,352

48,640

48,753 48,753 48,75334,643

69,801

85,123

101,201

103,474

104,745

105,466

105,750 105,750 105,75077,039

122,807

152,707

161,604

165,705

168,000

169,301

169,813 169,813 169,813

Accident year20072008200920102011201220132014201520162017 29,735

91,450

109,495

116,167

119,243

120,964

121,940

122,324 122,324 122,324

Marine - Incremental Chain ladder-Yearly Projections (N’000)Accident year 1

2

3

4

5

6

7

8

9 102007 10,571

25,047

5,113

-

69

-

-

- - -2008 12,972

16,890

4,437

1,255

-

-

-

- - -2009 46,872

34,727

259

1,929

1

-

-

- - -2010 28,528

14,866

1,219

118

6

-

-

- - -2011 53,979

58,238

157

1,615

-

-

2,161

- - -2012 48,346

12,789

6,613

-

-

-

-

- - -2013 23,330

5,311

108

-

-

-

-

- - -2014 12,303

6,956

-

-

-

-

-

- - -2015 10,138

21,755

428

-

-

-

-

- - -2016 18,537

2,049

-

-

-

-

-

- - -2017 19,537

-

-

-

-

-

-

- - -

Marine -

Projected Inflation Adjusted Chain Ladder -

Annual Projections (N’000)

Accident year 1

2

3

4

5

6

7

8

9 10

2007 33,541

102,583

114,957

114,957

115,092

115,092

115,092

115,092 115,092 115,0922008 35,757

76,631

86,236

88,699

88,699

88,699

88,699

88,699 88,699 88,6992009 113,435

188,608

189,116

192,497

192,498

192,498

192,498

192,498 192,498 192,5512010 61,755 90,930 93,066 93,257 93,265 93,265 93,265 93,265 93,461 93,4612011 105,936 207,985 208,240 210,659 210,659 210,659 212,820 213,316 213,316 213,3162012 84,715 105,464 115,371 115,371 115,371 115,371 116,765 116,765 116,765 116,7652013 37,853 45,809 45,956 45,956 45,956 49,319 49,319 49,319 49,319 49,3192014 18,432 27,940 27,940 27,940 30,949 30,949 30,949 30,949 30,949 30,9492015 13,857 38,956 39,385 42,858 42,868 42,868 42,868 42,868 42,868 42,8682016 21,386 23,435 37,098 37,546 37,555 37,555 37,555 37,555 37,555 37,5552017 19,537 44,448 46,626 47,251 47,264 47,264 47,264 47,264 47,264 47,264

Motor insurance - Incremental Chain ladderAccident year 1 2 3 4

2007 74,735 43,409 1,196 -2008 121,257 66,461 15,358 2,3752009 197,815 126,274 9,945 10,6952010 200,426 85,311 22,761 8,2552011 151,587 107,236 10,377 4,3162012 178,671 56,082 9,296 2,4202013 185,039 44,702 1,679 -2014 232,180 48,802 200 1202015 188,480 42,619 7,479 -2016 134,226

63,173

-

-

2017 157,881

-

-

-

Motor insurance -

Projected Inflation Adjusted Chain Ladder Accident year 1

2

3

4

2007 237,116

356,774

359,668

359,668

2008 334,245

495,088

528,333

532,993

2009 478,736

752,079

771,595

790,335

2010 433,858

601,284

641,167

654,560

2011 297,495

485,401

502,237

508,704

2012 313,080

404,072

417,998

421,306

2013 300,221

367,190

369,484

369,484

2014 347,836

414,544

414,774

414,894

2015 257,634

306,804

314,282

327,268

2016 154,857

218,030

252,237

256,057

2017 157,881

231,282

240,836

244,895

-Yearly Projections (N’000)5 6 7 8 9 10

611 - 25 - - -418 1,414 160 40 395 60

4,500 1,230 25 - - -6,166 169 1,718 - - -2,876 - - - - -

292 - - - - -5,000 - - - - -

- - - - - -- - - - - --

-

-

- - --

-

-

- - -

-

Annual Projections (N’000)5

6

7

8 9 10360,868

360,868

360,908

360,908 360,908 360,908533,726

536,019

536,259

536,313 536,769 536,829797,636

799,479

799,513

799,513 799,513 801,081663,798

664,028

666,010

666,010 674,714 674,714512,635

512,635

512,635

517,999 517,999 517,999421,643

421,643

424,945

424,945 424,945 424,945374,484

390,871

391,282

391,282 391,282 391,282422,003

422,743

423,255

423,255 423,255 423,255330,552

331,214

331,673

331,673 331,673 331,673258,964

259,550

259,957

259,957 259,957 259,957247,984

248,607

249,039

249,039 249,039 249,039


Unitrust Insurance Company Limited and Subsidiary Company


Engineering -

Incremental Chain ladder-Yearly Projections (N’000)

Accident year 1

2

3

4

5

6

7

8

9 102007 2,736

9,348

-

-

-

-

-

- - -2008 21,472

10,034

4,226

1,469

1,484

-

-

- - -2009 5,013

36,948

1,447

7,744

-

-

-

- - -2010 28,189

26,169

20,155

3,221

3,881

-

-

- - -2011 8,722

37,313

7,356

-

-

-

-

- - -2012 54,308

37,454

3,030

83

11,000

-

-

- - -2013 30,600

4,227

3,132

-

-

-

-

- - -2014 8,276

10,081

7,647

-

-

-

-

- - -2015 8,266

24,099

316

-

-

-

-

- - -2016 23,360

14,439

-

-

-

-

-

- - -2017 20,908

-

-

-

-

-

-

- - -

Engineering -

Cumulative Chain ladder-Annual Projections (N’000)

Accident year 1

2

3

4

5

6

7

8

9 102007 8,681 34,449 34,449 34,449 34,449 34,449 34,449 34,449 34,449 34,4492008 59,188 83,471 92,619 95,502 98,104 98,104 98,104 98,104 98,104 98,1042009 12,133 92,114 94,954 108,524 108,524 108,524 108,524 108,524 108,524 109,5362010 61,021 112,379 147,696 152,922 158,735 158,735 158,735 158,735 163,122 163,1222011 17,118 82,499 94,434 94,434 94,434 94,434 94,434 104,324 104,324 104,3242012 95,163 155,931 160,470 160,584 173,274 173,274 180,166 180,166 180,166 180,1662013 49,647 55,981 60,262 60,262 60,262 68,725 69,393 69,393 69,393 69,3932014 12,399 26,178 35,000 35,000 44,405 45,258 45,756 45,756 45,756 45,7562015 11,299 39,102 39,419 56,656 58,805 60,078 60,820 60,820 60,820 60,8202016 26,950 41,389 58,688 60,947 63,588 65,152 66,065 66,065 66,065 66,0652017 20,908 49,407 56,246 58,588 61,325 62,946 63,892 63,892 63,892 63,892

Claims Paid Triangulations as at 31 December 2016FIRE - Incremental Chain ladder-Yearly Projections (N’000)

Accident year 1 2 3 4 5 6 7 8 9 102007 62,797 46,473 1,319 74 94 - - - - -2008 37,939 51,951 733 33 - - - - - -2009 18,787 24,488 881 4,361 - 1,000 - - - -2010 - - - - - - - - - -2011 82,103 70,772 6,260 1,638 - - - - - -2012 89,255 37,272 3,761 1,258 - - - - - -2013 61,298 37,760 - - - - - - - -2014 23,418 41,586 248 - - - - - - -2015 17,617 4,310 - - - - - - - -2016 25,137

-

-

-

-

-

-

- - -

FIRE - Cumulative Chain ladder-Annual Projections (N’000)Accident year 1 2 3 4 5 6 7 8 9Accident year 1 2 3 4 5 6 7 8 9 10

2007 145,759 256,797 259,563 259,702 259,861 259,861 259,861 259,861 259,861 259,8612008 90,646 199,623 200,999 201,054 201,054 201,054 201,054 201,054 201,054 202,7792009 39,409 85,356 86,855 93,478 93,478 94,777 94,777 94,777 94,777 94,7772010 - - - - (26) (26) (26) 4,178 4,178 4,1782011 139,665 247,156 255,960 258,086 258,086 258,086 259,604 259,604 259,604 259,6042012 135,563 187,978 192,862 194,353 194,353 195,989 195,989 195,989 195,989 195,9892013 86,205 135,237 135,237 135,237 137,828 137,828 137,828 137,828 137,828 137,8282014 30,409 79,681 79,928 83,818 83,836 83,836 83,836 83,836 83,836 83,8362015 20,873

25,183

42,875

43,370

43,380

43,380

43,380

43,380 43,380 43,3802016 25,137

93,120

94,950

96,151

96,175

96,175

96,175

96,175 96,175 96,175




Marine - Incremental Chain ladder-Yearly Projections (N’000)Accident year 1 2 3 4 5 6 7 8 9 10

2007 10,571 25,047 5,113 - 69 - - - - -2008 12,972 16,890 4,437 1,255 - - - - - -2009 46,872 34,727 259 1,929 1 - - - - -2010 28,528 14,866 1,219 118 6 - - - - -2011 53,979 58,238 157 1,615 - - - - - -2012 48,346 12,789 6,613 - - - - - - -2013 23,330 6,040 108 - - - - - - -2014 12,303 6,956 - - - - - - - -2015 10,423

21,755

-

-

-

-

-

- - -2016 18,537

-

-

-

-

-

-

- - -

Marine -


Accident year 1

2

3

4

5

6

7

8

9 102007 24,538

84,382

95,107

95,107

95,224

95,224

95,224

95,224 95,224 95,2242008 30,993

66,422

74,748

76,882

76,882

76,882

76,882

76,882 76,882 83,2172009 98,323

163,481

163,922

166,852

166,853

166,853

166,853

166,853 166,906 166,9062010 53,528

78,816

80,667

80,833

80,840

80,840

80,840

81,035 81,035 81,0352011 91,823

180,276

180,498

182,594

182,594

182,594

183,090

183,090 183,090 183,0902012 73,429

91,414

100,001

100,001

100,001

101,395

101,395

101,395 101,395 101,3952013 32,810

40,654

40,781

40,781

43,203

43,203

43,203

43,203 43,203 43,2032014 15,977

24,218

24,218

27,221

27,228

27,228

27,228

27,228 27,228 27,2282015 12,349

34,104

35,731

36,199

36,209

36,209

36,209

36,209 36,209 36,2092016 18,537

34,755

36,546

37,061

37,071

37,071

37,071

37,071 37,071 37,071

Accident year 1

2

3

4

5

6

7

8 9 10

General Accident - Cumulative Chain ladder-Annual Projections (N’000)

2007 75,813 118,362 155,260 179,649 189,094 191,165 192,808 192,808 192,808 192,8082008 30,629 166,835 226,027 235,489 240,864 249,020 249,020 249,020 249,020 255,4992009 146,852 307,230 354,145 363,270 371,941 371,945 375,932 376,823 383,168 383,1682010 152,833 253,511 278,562 303,464 305,478 305,507 305,542 318,171 318,171 318,1712011 106,934 211,545 259,660 263,658 264,234 266,457 280,354 280,756 280,756 280,7562012 108,034 218,237 220,893 221,333 223,000 240,446 242,042 242,439 242,439 242,4392013 82,192 115,744 124,567 125,266 135,146 136,757 137,798 138,057 138,057 138,0572014 45,249 61,474 63,055 75,860 77,598 78,643 79,318 79,486 79,486 79,4862015 39,550 70,024 125,963 133,040 136,380 138,389 139,687 140,010 140,010 140,0102016 66,776 138,384 165,309 175,556 180,392 183,301 185,180 185,648 185,648 185,648

General Accident - Incremental Chain ladder-Yearly Projections (N’000)

Accident year 1

2

3

4

5

6

7

8

9Accident year 1

2

3

4

5

6

7

8

9 102007 32,662

17,808

17,590

12,998

5,552

1,364

1,168

- - -2008 12,819

64,931

31,547

5,563

3,539

5,799

-

- - -2009 70,006

85,476

27,579

6,008

6,166

3

3,365

891 - -2010 81,454

59,185

16,494

17,707

1,551

25

34

- - -2011 62,863

68,876

34,213

3,079

486

2,223

-

- - -2012 71,130 78,363 2,046 371 1,667 - - - - -2013 58,445 25,839 7,447 698 - - - - - -2014 34,846 13,694 1,581 - - - - - - -2015 33,381 30,475 - - - - - - - -2016 66,776 - - - - - - - - -




Motor - Incremental Chain ladder-Yearly Projections (N’000)Accident year 1 2 3 4 5 6 7 8 9 10

2007 74,735 43,409 1,196 - 611 - 25 - - -2008 121,257 66,461 15,358 2,375 418 1,414 160 40 395 -2009 197,815 126,274 9,945 10,695 4,500 1,230 25 - - -2010 200,426 85,311 22,761 8,255 6,166 169 1,718 - - -2011 151,587 107,236 10,377 4,316 2,876 - - - - -2012 178,671 56,082 9,911 2,420 292 - - - - -2013 185,039 44,823 1,679 - - - - - - -2014 234,537 48,872 200 - - - - - - -2015 188,480 42,619 - - - - - - - -2016 134,226 - - - - - - - - -

Engineering - Incremental Chain ladder-Yearly Projections (N’000)Accident year 1 2 3 4 5 6 7 8 9 10

2007 2,736

9,348

-

-

-

-

-

- - -2008 21,472

10,034

4,226

1,469

1,484

-

-

- - -2009 5,013

36,948

1,447

7,744

-

-

-

- - -2010 28,189

26,169

20,155

3,221

3,881

-

-

- - -2011 8,722

37,313

7,356

-

-

-

-

- - -2012 54,308 37,454 3,241

83

11,000

-

-

- - -2013 30,600 5,233 3,132

-

-

-

-

- - -2014 8,276 25,962 7,647 - - - - - - -2015 8,695 24,099 - - - - - - - -2016 23,360 - - - - - - - - -

Engineering -


Accident year 1

2

3

4

5

6

7

8

9 102007 6,351

28,686

28,686

28,686

28,686

28,686

28,686

28,686 28,686 28,6862008 51,303

72,351

80,280

82,779

85,034

85,034

85,034

85,034 85,034 90,2012009 10,516

79,842

82,304

94,066

94,066

94,066

94,066

94,066 95,078 95,0782010 52,891 97,407 128,019 132,549 137,588 137,588 137,588 141,975 141,975 141,9752011 14,837 71,509 81,853 81,853 81,853 81,853 94,043 94,043 94,043 94,0432012 82,485 135,157 139,366 139,464 150,464 157,643 157,643 157,643 157,643 157,6432013 43,033 49,828 53,539 53,539 65,113 65,113 65,113 65,113 65,113 65,1132014 10,747 41,507 49,154 64,673 67,061 67,061 67,061 67,061 67,061 67,0612015 10,302 34,401 73,728 76,612 79,715 79,715 79,715 79,715 79,715 79,7152016 23,360 54,575 62,330 65,056 67,988 67,988 67,988 67,988 67,988 67,988

Motor -


Accident year 1

2

3

4

5

6

7

8

9Accident year 1

2

3

4

5

6

7

8

9 102007 173,470 277,186 279,695 279,695 280,735 280,735 280,770 280,770 280,770 280,7702008 289,716 429,130 457,947 461,986 462,621 464,609 464,816 464,864 465,259 478,2052009 414,957 651,884 668,800 685,044 691,372 692,969 692,999 692,999 694,923 694,9232010 376,058 521,179 555,748 567,357 575,364 575,564 577,282 585,764 585,764 585,7642011 257,862 420,734 435,328 440,932 444,340 444,340 451,711 451,730 451,730 451,7302012 271,370 350,240 363,109 365,977 366,268 379,768 380,261 380,280 380,280 380,2802013 260,224 318,429 320,418 320,418 348,975 349,680 350,199 350,219 350,219 350,2192014 304,556 362,460 362,660 371,429 374,876 375,751 376,396 376,421 376,421 376,4212015 223,311 265,930 305,239 310,441 313,695 314,521 315,131 315,154 315,154 315,1542016 134,226 211,292 220,222 224,367 226,961 227,619 228,105 228,124 228,124 228,124




(C) Financial risk

(a) Introduction and overviewThe Company has a robust and functional Enterprise-wide Risk Management (ERM) Framework that is responsible for identifying and managing the inherent and residual risks facing the Group.

The risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index or other variable, provided in the case of a non–financial variable constitutes financial risk. The Company is exposed to a range of financial risks through its financial assets, financial liabilities, reinsurance assets and insurance liabilities.

The Group has exposure to the following risks from its use of financial instruments:- Credit risk- Liquidity risk- Market risk

Credit risksCredit risk is the risk that one party to a financial instrument will cause a financial loss to the other party by failing to discharge an obligation. The credit risk in respect of customer balances incurred on non–payment of premiums or contributions will only persist during the grace period specified in the policy document or trust deed until expiry, when the policy is either paid up or terminated.

Exposure to this risk results from financial transactions with a counter party including issuer, debtor, investee, borrower, broker, policy holder, reinsurer or guarantor.

The Company is exposed to credit risk in terms of premium payment and investments in counterparties, considerable risks exist that brokers and large corporates who are allowed extended payment period may default and this is closely allied to cash flow risks. The three sources of credit risk identified are:

- Direct Default Risk: risk that the company will not receive the cash flows or assets to which it is entitled because a party with which the firm has a bilateral contract defaults on one or more obligations.

- Downgrade Risk: risk that changes in the possibility of a future default by an obligor due to a downgrade in its credit ratings will adversely affect the present value of the contract with the obligor today.

- Settlement Risk: risk arising at the settlement of a transaction which relates to the lag between the value and settlement dates of securities transactions.

Saham Unitrust Insurance is exposed to risk relating to its debt holdings in its investment portfolio, outstanding premiums from customers and the reliance on reinsurers to make payment when certain loss conditions are met.

Investment portfolioThe Company’s investment policy puts limits on the fixed income and money market instruments including portfolio composition limits, issuer type limits, aggregate issuer limits and corporate sector limits. The Group’s investment portfolio is exposed to credit risk through its Fixed Income and Money Market instruments. Fixed Income & Money




Market instruments contributes about 86% (2016: 90%) of the Company’s investments.The Company’s exposure to credit risk is low as the Government sector (Government Treasury bills) accounted for the largest part 60%(2016: 67%) of the investments as at 31 December 2017.

The Company further manages its exposure to credit risk through counterparty risk using established limits as approved by the Board. These limits are determined based on credit ratings of the counterparty amongst other factors. All fixed income investments are measured for performance on a quarterly basis and monitored by management on a monthly basis.

Outstanding premiumThe Company categorizes its exposure to this risk based on business types (direct and brokered business).

As a result of the growing challenges arising from huge levels of outstanding premium reported in the financial statements of insurance Companies, a revised guideline dated 1 January 2013 was issued by NAICOM on Insurance premium collection and remittance in which it was specified that there shall be no outstanding premium in the books of any insurer related to direct business as covers granted on credit are not recognised by the law. Outstanding premium from Brokers can be recorded in the books and if uncollected 30 days after initial recognition, is to be fully impaired.

The Company focuses on effective management of its exposure to credit risk especially premium related debts. Credit risk arises from insurance cover granted to parties with payment instruments or payments plan issued by stating or implying the terms of contractual agreement.

The following policies and procedures are in place to mitigate the Company’s exposure to credit risk:

- The Company’s enterprise risk management policy sets out the assessment and determination of what constitutes credit risk for the Company. Compliance with the policy is monitored, exposures and breaches are reported to the Company’s risk committee. The policy is regularly reviewed for pertinence and for changes in the risk environment.

- Net exposure limits are set for each counterparty or group of counterparties and industry segment (i.e. limits are set for investments and cash deposits, foreign exchange trade exposures and minimum credit ratings for investments that may be held).

- The Company further restricts its credit risk exposure by entering into master netting arrangements with counterparties with which it enters into significant volumes of transactions. However, such arrangements do not generally result in an offset of balance sheet assets and liabilities, as transactions are usually settled on a gross basis. However, the credit risk associated with such balances is reduced in the event of a default, when such balances are settled on a net basis. The Company’s reinsurance treaty contracts involve netting arrangements.

- Reinsurance is placed with counterparties that have a good credit rating and concentration of risk is avoided by following policy guidelines in respect of




counterparties’ limits that are set each year by the management and are subject to regular reviews. At each reporting date, management performs an assessment of creditworthiness of reinsurers and updates the reinsurance purchase strategy, ascertaining suitable allowance for impairment.

- The Company sets the maximum amounts and limits that may be advanced to corporate counterparties by reference to their long–term credit ratings and worthiness.

- The credit risk in respect of customer balances incurred on non–payment of premiums or contributions will only persist during the grace period specified in the policy document or trust deed until expiry, when the policy is either paid up or terminated. Commission paid to intermediaries is netted off against amounts receivable from them to reduce the risk of doubtful debts.

Reinsurance The Company’s credit risk originates from reinsurance recoverable transactions, retail clients, corporate clients, brokers and agents. Reinsurance is placed with only reinsurers with good credit rating. Management monitors the creditworthiness of all reinsurers by reviewing their annual financial statements and through ongoing communications. Reinsurance treaties are reviewed annually by management prior to renewal of the reinsurance contract.

‘The table below shows the maximum exposure to credit risk for the Group’s financial assets. The maximum exposure is shown gross, before the effect of mitigation.

Group Group Company Company 31-Dec-17 31-Dec-16 31-Dec-17 31-Dec-16

Financial Instruments N'000 N’000 N’000 N’000 Financial assets:

Cash and cash equivalents 599,966 933,557 597,985 932,970

Available-for-sale securities 400,667 293,198 400,667 293,198

Held-to-maturity securities

6,023,847

5,915,783

6,023,847

5,915,783

Loans and receivables

15,526

2,246

15,526

2,246

Pledged asset

-

77,971

-

77,971

Trade receivable

15,431

5,624

15,431

5,624

Reinsurance assets

1,827,384

877,520

1,827,384

942,605

Other receivables

811,828

715,110

789,571

710,357

Investments in

finance lease

20,154

13,491

20,154

13,491

TOTAL CREDIT RISK EXPOSURE

9,714,803

8,834,500

9,690,565

8,894,245

Age analysis of premium debtors For premium debtors to be classified as ‘past–due and impaired’ contractual payments from brokers must be in arrears for more than 30 days.




Group and Company

31-Dec-17

0-30

days

31 to 180 days

181 days and

above Total

N’000

N’000

N’000 N’000

Premium debtors

15,431

-

388,352

403,783

31-Dec-16

0-30 days

31 to 180 days

181 days and

above Total

N’000 N’000 N’000 N’000Premium debtors 5,624 - 388,352 393,975

The following table breaks down the Group's main credit exposure at their gross amounts for the reported periods.

2017 2016 N’000 N’000

Not past due 15,431 5,624 Past due but not impaired - - Impaired 388,352 388,352

Gross 403,783 393,975

Impairment allowance

Specific impairment

(388,352)

(388,352)

Collective impairment

-

-

15,431

5,624

Impairment ModelPremium debtors are receivables which are recognized at a fair value and subsequently measured at amortized cost, less provision for impaired receivables. Premium debt from brokers business are impaired once they are outstanding for more than 30 days while premium from direct business is not recognized in the books if payment is yet to be received.

The impairment of the premium debtors is assessed individually. The premium debt of the Company is assessed for individual or specific impairment once it is outstanding for over 30 days.

Impaired financial assetsThere are impaired premium debtors of N388 million (31 December 2016: N388 Million), impaired loans and receivables of N87 million (31 December 2016: N87million) and impaired unquoted equity of N25 million (31 December 2016: N25 million). No collateral is held as security for any past due or impaired assets. The Company records impairment allowances for loans and receivables in a separate impairment allowance account.

Other receivablesOther receivables balances constitute other debtors, dividend and inter company receivables. The Company has an internal system of assessing the credit quality of other receivables through established




policies and approval systems. The Company constantly monitors its exposure to these receivables via periodic performance review. The Company further manages its exposure to credit risk through deduction of transactions at source and investment in blue-chip companies quoted on Nigerian Stock Exchange. The exposure to credit risk associated with other receivables is considered low.

Liquidity risksLiquidity risk is the risk of loss due to insufficient liquid assets to meet cash flow requirements or to fulfil its financial obligation once claims crystallize. In respect of catastrophe events there is also a liquidity risk associated with the timing differences between gross cash outflows and expected reinsurance recoveries.

The Company mitigates this risk by monitoring cash activities and expected outflows. The Company has no material commitments for capital expenditures. Claims payments are funded by current operating cash flow including investment income. The Company has no tolerance for liquidity risk and is committed to meeting all liabilities as they fall due.

The following policies and procedures are in place to mitigate the Company’s exposure to liquidity risk:

- The liquidity risk policy sets out the assessment and determination of what constitutes liquidity risk for the Company. Compliance with the policy is monitored, exposures and breaches are reported to the Company’s Board Risk Committee. The policy is regularly reviewed for pertinence and for changes in the risk environment.

- Guidelines are set for asset allocations, portfolio limit structures and maturity profiles of assets, in order to ensure sufficient funding is available to meet insurance and investment contracts obligations.

- Contingency funding plans are in place, which specify minimum proportions of funds to meet emergency calls as well as specifying events that would trigger such plans.

Saham Unitrust maintains a portfolio of highly marketable assets that can be easily liquidated in the event of an unforeseen interruption of cash flow. The Company also has committed lines of credit that it can access to meet liquidity needs to assist users in understanding how assets and liabilities have been matched.

The following table summarizes the maturity profile of the non–derivative financial assets and financial liabilities of the Company based on remaining undiscounted contractual obligations.

For insurance contracts liabilities and reinsurance assets, maturity profiles are determined based on estimated timing of net cash outflows from the recognised insurance liabilities. Unearned premiums and the reinsurers’ share of unearned premiums have been excluded from the analysis as they are not contractual obligations.

Repayments which are subject to notice are treated as if notice were to be given immediately.

Reinsurance assets have been presented on the same basis as insurance liabilities. The gross nominal inflow/(outflow) disclosed in the table is the contractual, undiscounted cash flow on the financial assets, financial liabilities or commitments.




Mat

uri

ty a

nal

ysis

(co

ntr

actu

al u

nd

isco

un

ted

cas

h f

low

bas

is f

or n

on–d

eriv

ativ

es)

Gro

up

(31

Dec

emb

er 2

017)

Not

e C

arry

ing

amou

nt

Gro

ss

nom

inal

Infl

ow/

(ou

tflo

w)

0

- 3 m

onth

s 3

-

6 m

onth

s

6 -

12

m

onth

s

1 -

5

year

s

Fin

anci

al A

sset

s:

Cas

h an

d ca

sh e

quiv

alen

ts

24

599,

966

59

9,96

6

599,

966

-

-

-

Ava

ilab

le-f

or-s

ale

secu

riti

es

25

400,

667

40

0,66

7

-

-

-

400,

667

Hel

d-to

-mat

urit

y se

curi

ties

26

6,

023,

847

6,

023,

847

5,08

3,04

7

840,

644

10

0,15

7

Loa

ns a

nd r

ecei

vabl

es

27

15,5

26

15,5

26

5,84

2

4,49

8

4,65

5

531

Tra

de r

ecei

vabl

e

29

15,4

31

15,4

31

15,4

31

-

-

-

Rei

nsur

ance

ass

ets

30

2,

318,

208

2,

318,

208

65

,167

36

7,78

1

958,

481

92

6,77

9

Oth

er r

ecei

vabl

es

32

820,

498

82

0,49

8

45,8

46

97,5

71

21,9

04

655,

177

Inve

stm

ents

in f

inan

ce le

ase

33

20

,154

20

,154

12

,219

7,

935

Tot

al a

sset

s

10,2

14,2

96

10,2

14,2

96

732,

252

5,

552,

895

1,

837,

903

2,

091,

246

Fin

anci

al L

iab

ilit

ies:

-

Insu

ranc

e co

ntra

ct li

abil

itie

s

39

3,37

2,75

3

3,37

2,75

3

92,8

29

111,

285

1,

846,

652

1,32

1,98

6.55

Tra

de p

ayab

les

40

344,

795

344,

795

344,

795

-

-

-

Oth

er p

ayab

les

41

434,

223

434,

223

174,

823

125,

630

26,1

53

155,

175

Tot

al li

abil

itie

s

4,15

1,77

1

4,15

1,77

1

612,

446

236,

914

1,87

2,80

5

1,47

7,16

1

Gap

(as

sets

-

liab

ilit

ies)

6,06

2,52

5

6,06

2,52

5

119,

806

5,31

5,98

1

(34,

902)

661,

643

Cu

mu

lati

ve li

qu

idit

y ga

p

6,06

2,52

5

6,06

2,52

5

6,18

2,33

2

11,4

98,3

13

11,4

63,4

10

12,1

25,0

53




Gro

up (

31 D

ecem

ber

2016

)

Not

e

Car

ryin

g am

ount

Gro

ssno

min

alIn

flow

/

(out

flow

)

0 -

3 m

onth

s

3 -

6 m

onth

s

6 -

12

mon

ths

1 -

5 ye

ars

Fina

ncia

l Ass

ets:

Cas

h an

d ca

sh e

quiv

alen

ts

24

933,

557

933,

557

933,

557

-

-

-A

vaila

ble-

for-

sale

sec

uriti

es

25

293,

198

293,

198

-

-

-

293,

198

Hel

d-to

-mat

urity

sec

uriti

es

26

5,91

5,78

3

5,91

5,78

3

855,

557

3,97

3,92

2

1,08

6,30

4

Loa

ns a

nd r

ecei

vabl

es

27

2,24

6

2,24

6

-

2,24

6

-

-Pl

edge

d as

sets

28

77,9

71

77,9

71

-

8,71

2

69,2

59

Tra

de r

ecei

vabl

e29

5,62

5

5,62

5

5,62

5

-

-

-

Rei

nsur

ance

ass

ets

30

1,19

3,72

3

1,19

3,72

3

41,2

94

34,2

89

944,

220

173,

920

Oth

er r

ecei

vabl

es32

776,

205

776,

205

58,2

55

4,96

9

25,1

88

687,

793

Inve

stm

ents

in f

inan

ce le

ase

33

13,4

91

13,4

91

4,52

2

3,88

5

5,08

4

-T

otal

ass

ets

9,21

1,80

0

9,21

1,80

0

1,89

8,81

0

4,02

8,02

2

2,13

0,05

5

1,15

4,91

1

Fina

ncia

l Lia

bilit

ies:

-

Insu

ranc

e co

ntra

ct li

abili

ties

39

2,45

4,98

0

2,45

4,98

0

322,

125

201,

642

712,

125

1,21

9,08

8T

rade

pay

able

s40

207,

442

207,

442

207,

442

-

-O

ther

pay

able

s41

593,

782

593,

782

104,

390

155,

666

321,

250

15,4

76T

otal

lia

bilit

ies

3,25

6,20

4

3,25

6,20

4

633,

956

354,

309

1,03

3,37

5

1,23

4,56

5

Gap

(as

sets

-lia

bilit

ies)

5,95

5,59

6

5,95

5,59

6

1,26

4,85

4

3,67

3,71

5

1,09

6,68

0

(79,

653)

Cum

ulat

ive

liqui

dity

gap

6,24

8,02

2

5,90

8,35

2

7,22

0,44

9

10,8

94,1

64

11,9

90,8

44

11,9

11,1

91




Com

pan

y (

31 D

ecem

ber

2017)

Note

Carr

yin

g

am

ou

nt

Gro

ss

nom

inal

Infl

ow

/

(ou

tflo

w)

0 -

3

mon

ths

3 -

6 m

on

ths

6 -

12

mon

ths

1 -

5 y

ears

Fin

an

cial A

sset

s:

Cas

h a

nd c

ash e

quiv

alen

ts

24

932,9

70

932,9

70

932,9

70

-

-

Avai

lable

-for-

sale

sec

uri

ties

25

400,6

67

400,6

67

-

-

-

400,6

67

to-m

aturi

ty s

ecuri

ties

26

6,0

23,8

47

6,0

23,8

47

-

5,0

83,0

47

840,6

44

100,1

57

Loan

s an

d r

ecei

vab

les

27

15,5

26

15,5

26

5,8

42

4,4

98

4,6

55

Tra

de

rece

ivab

le

29

15,4

31

15,4

31

15,4

31

Rei

nsu

rance

ass

ets

30

2,3

18,2

08

2,3

18,2

08

65,1

67

367,7

81

958,4

81

926,7

79

Oth

er r

ecei

vab

les

32

817,5

09

817,5

09

45,8

46

97,5

71

21,9

04

709,4

12

Inves

tmen

ts i

n f

inan

ce l

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33

20,1

54

20,1

54

-

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12,2

19

Tota

l ass

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10,4

36,2

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10,4

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20,8

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Fin

an

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Lia

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Insu

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liab

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ies

39

3,3

72,7

53

3,3

72,7

53

92,8

29

111,2

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46,6

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Tra

de

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able

s

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344,7

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344,7

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344,7

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-

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Oth

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481,7

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481,7

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612,4

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236,9

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Gap

(as

sets

-

liab

ilit

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6,2

36,9

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6,2

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4,2

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194,9

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526,7

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Cum

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6,2

36,9

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6,2

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7,5

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11,7

52,1

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11,9

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Hel

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The

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ted

to b

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Com

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Not

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Ass

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Cas

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Inve

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F

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In

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(as

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5 5,90

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3,71

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(123

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43

11,9

36,2

23

11,8

12,6

29




Group31 December 2017 31 December 2016

Current

Non-current

Total

Current

Non-current

Total

In thousands of naira

Asset


599,966

-

599,966

933,557

-

933,557Available-for-sale securities

-

400,667

400,667

-

293,198

293,198Held-to-maturity securities

5,923,690

100,157

6,023,847

5,915,783

-

5,915,783Loans and receivables

15,526

-

15,526

2,246

-

2,246Pledged assets

-

-

-

77,971

-

77,971Trade receivables

15,431

-

15,431

5,624

-

5,624Reinsurance assets

1,391,429

926,779

2,318,208

1,019,803

464,670

1,051,283Deferred acquisition cost

72,189

-

72,189

40,619

-

40,619Other receivables and 165,321

655,177

820,498

41,168

727,349

803,916Investments in finance lease

12,219

7,935

20,154

13,491

0.00

13,491Investment property

-

365,000

365,000

-

308,000

308,000Intangible assets

-

5,156

5,156

-

3,374

3,374Property, plant and equipment

-

1,786,834

1,786,834

-

1,713,660

1,713,660Statutory deposits

-

315,000

315,000

-

315,000

315,000

Total assets

8,195,771

4,562,704

12,758,476

8,050,262

3,494,945 11,545,207

Liabilities Insurance contract liabilities 2,050,766 1,321,987 3,372,753 1,235,892 1,219,088 2,454,980Trade payables 344,795 - 344,795 207,442 - 207.442Provision and other payables 326,606 107,617 434,223 578,306 15,476 593,782Current income tax liabilities 279,878 - 279,878 358,910 - 371,662Deferred tax liability

-

511,693

511,693

-

366,159

366,159

Total liabilities

3,002,044

1,941,297

4,943,341

2,380,550

1,600,723

3,981,273

Gap 5,193,727

2,621,407

7,815,134

5,669,712

1,894,222

7,563,934

Company

31 December 2017

31 December 2016

Current

Non-current

Total

Current

Non-current

Total

In thousands of naira

Asset


597,985

-

597,985

932,970

-

932,970Available-for-sale securities

-

400,667

400,667

-

245,319


5,923,690

100,157

6,023,847

5,915,783

-


15,526

-

15,526

2,246

-

2,246Pledged assets

-

-

-

77,971

-


15,431

-

15,431

5,624

-


1,391,429

926,779

2,318,208

1,019,803

173,920


72,189

72,189

40,619

-

40,619Other receivables and 165,321

652,188

817,509

41,168

727,349


12,219

7,935

20,154

13,491

0.00

13,491Investment in subsidiary

-

1,000

1,000

-

1,000

1,000Investment property

-

365,000

365,000

-

308,000


-

5,156

5,156

-

3,374

3,374Property, plant and equipment

-

1,786,834

1,786,834

-

1,713,660


-

315,000

315,000

0.00

315,000

315,000

Total assets

8,193,790

4,560,716

12,754,506

8,044,923

3,495,945

11,540,867

Liabilities


2,050,766

1,321,987

3,372,753

1,302,641

1,149,224

2,451,865

Trade payables

344,795

-

344,795

207,442

-

207,442Provision and other payables 326,606 155,175 481,781 467,742 169,981 637,723Current income tax liabilities 277,521 - 277,521 357,565 - 369,215Deferred tax liability 511,693 511,693 - 366,158 366,158

Total liabilities 2,999,688 1,988,854 4,988,542 2,268,641 1,755,227 4,023,867

Gap 5,194,102 2,571,861 7,765,964 5,776,282 1,740,718 7,517,000




Market risksMarket risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: foreign exchange rates (foreign currency risk), market interest rates (interest rate risk) and market prices (price risk).

The Company’s enterprise risk management policy sets out the assessment and determination of what constitutes market risk. Compliance with the policy is monitored and exposures and breaches are reported to the Board Risk Committee. The policy is reviewed regularly for pertinence and for changes in the risk environment.

Guidelines are set for asset allocation and portfolio limit structure, to ensure that assets back specific policyholder’s liabilities and that assets are held to deliver income and gains for policyholders who are in line with expectations of the policyholders.

Foreign currency riskForeign Exchange risk is the exposure of the Group’s financial condition to adverse movements in exchange rates. The Group is exposed to foreign exchange currency risk primarily through undertaking certain transactions denominated in foreign currency.

The Group’s principal transactions are carried out in Naira and its exposure to foreign exchange risk arise primarily with respect to transactions done in other foreign currencies: UK pound sterling, Euro and US dollar.

The Group’s financial assets are primarily denominated in the same currencies as its insurance contract liabilities. Thus, the main foreign exchange risk arises from recognised assets and liabilities denominated in currencies other than those in which insurance contract liabilities are expected to be settled.

The Group’s foreign exchange risk is considered at a group level since an effective overview of such risk is a critical element of the group’s asset/liability risk management. The Board of Directors defines its risk tolerance levels and expectations for foreign exchange risk management and ensures that the risk is maintained at prudent levels.

Foreign exchange risk is quantified using the net balance of assets and liabilities in each currency, and their total sum.

Group (31 December 2017)

Cash and cash equivalents 933,557 777,096 130,717 23,932 1,811 Available-for-sale securities 400,667 370,167 30,500 - - Held-to-maturity securities

6,023,847

4,744,918

1,241,220

16,496

21,213

Loans and receivables 15,526

15,526

-

-

-

Pledged assets

-

-

-

-

-

Trade receivables

15,431

12,557

2,874

675,738

- Reinsurance assets

2,318,208

675,738

1,642,470

-

-

Other receivables

820,498

818,326

2,172 Investments in finance lease

20,154

20,154

-

-

-

Total assets 10,547,888 7,434,482 3,049,953 716,166 23,024

Total Naira US Dollar

UK Pound

Sterling Euro




Insurance contract liabilities 3,372,753 1,249,780 2,120,858 2,114 -

Trade payables 344,795 223,117 120,773 898 7

Other payables 434,223 432,242 1,981 - -

Total Liabilities 4,151,770 1,905,140 2,243,611 3,012 7

Group (31 December 2016)


UK Pound

Sterling Euro

Cash and cash equivalents 933,557 777,096 130,717 23,932 1,811

Available-for-sale securities 293,198 262,698 30,500 - -

Held-to-maturity securities 5,915,783 4,390,776 1,487,368 16,447 21,192

Loans and receivables 2,246 2,246

Pledged assets 77,971 68,818 9,154 - -

Trade receivables 5,625 5,429 195 - -

Reinsurance assets 1,193,723 416,181 777,542 - -

Other receivables 728,961 728,924 37

Investments in finance lease 13,491 13,491 - - -

Total assets 9,164,554 6,665,659 2,435,514 40,379 23,003

Insurance contract liabilities 2,454,980 1,737,342 717,638 - -

Trade payables 207,442 202,819 2,371 2,249 2

Other payables 293,792 593,782 - - -

Total Liabilities 3,256,204 2,533,945 720,010 2,249 2


UK Pound

Sterling Euro

The table below summarises the Group's financial instruments categorised by currency:Company (31 December 2017)


UK Pound

Sterling Euro

Cash and cash equivalents 933,557 777,096 130,717 23,932 1,811 Available-for-sale securities 400,667 370,167 30,500 - - Held-to-maturity securities 6,023,825 4,744,918 1,241,220 16,496 21,192 Loans and receivables 15,526 15,526 - - - Pledged assets - - - - - Trade receivables 15,431 12,557 2,874 - - Reinsurance assets 2,318,208 675,738 1,642,470 Other receivables 820,498 818,326 2,172 Investments in finance lease 20,154 20,154 - - - Total assets 10,547,866 7,434,482 3,049,953 40,428 23,003




Insurance contract liabilities 3,372,753 1,249,780 2,120,858 2,114 - Trade payables 344,792 223,117 120,773 898 7 Other payables 481,781 479,800 1,981 - - Total Liabilities 4,199,328 1,952,698 2,243,611 3,012 7

Company (31 December 2016)

Total

Naira

US Dollar

UK Pound

Sterling

Euro


932,970

776,489

130,737

23,932

1,811 Available-for-sale securities

293,198

262,698

30,500

-

- Held-to-maturity securities

5,915,783

4,390,776

1,487,368

16,447

21,192

Loans and receivables

2,246

2,246

-

-

- Pledged assets

77,971

68,818

9,154

-

- Trade receivables

5,625

5,625

-

-

- Reinsurance assets

416,218

416,181

37

Other receivables

771,452

771,415

37 Investments in finance lease

13,491

13,491

-

-

- Total assets

8,428,955

6,707,739

1,657,833

40,379

23,003


2,454,980

1,737,342

717,638

-

-

Trade payables

207,442

205,070

2,371

-

-

Other payables

637,723

637,723

-

-

-

Total Liabilities

3,300,145

2,580,135

720,010

-

-


UK Pound

Sterling Euro

Interest rate riskInterest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates, yield curves and credit spreads.

Exposure to interest risk primarily results from timing differences in the repricing of assets and liabilities as they mature (fixed rate instruments) or contractually repriced (floating rate instruments).

The Company monitors this exposure through periodic reviews of the assets and liability position. Estimates of cash flows, as well as the impact of interest rate fluctuations relating to the investment portfolio and insurance provisions are modelled and reviewed. Interest rate risk is also managed through monitoring of interest rate gaps and sensitivity analysis across all investment portfolios.

The overall objective of these strategies is to limit the net change in value of assets and liabilities arising from interest rate movements.

While it is more difficult to measure the interest sensitivity of insurance liabilities than that of the related assets, to the extent that such sensitivities are measurable, then the interest rate movements will generate asset value changes that substantially offset changes in the value of the liabilities relating to the underlying products. The Company is also exposed to the risk of changes in future cash flows from fixed income securities arising from the changes in interest rates. The Company, however, has no significant concentration of interest rate risk.




Inte

rest

ra

te g

ap

p

osi

tion

Gro

up

(3

1 D

ecem

ber 2

01

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1 -

3

mo

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Ca

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Cash

an

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9

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-

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Held

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Inv

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7,5

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Insu

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ies

92

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9

111

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5

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2

1,3

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To

tal

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rest

ra

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8

40,7

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4.9

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(989

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)

(1,2

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Inte

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(3

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1 -

3

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Held

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Insu

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To

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A s

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Inte

rest

rat

e ga

p

pos

itio

nC

omp

any

(31

Dec

emb

er 2

017)

1

-

3 m

onth

s

3 -

6

mon

ths

6

-12

mon

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1 - 5

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s C

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Cas

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93

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933,

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Hel

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5,08

3,04

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840,

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6,02

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Loa

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5,84

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531

15,5

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Ple

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Inve

stm

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in f

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12,2

19

7,93

5

20,1

54

939,

399

5,08

7,54

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857,

517

108,

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6,99

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4

Insu

ranc

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ntra

ct li

abil

itie

s

92,8

29

111,

285

1,84

6,65

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1,32

1,98

7

3,37

2,75

3T

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rest

rat

e ga

p

92,8

29

111,

285

1,84

6,65

2

1,32

1,98

7

3,37

2,75

3




Inte

rest

rat

e ga

p

pos

itio

n

Com

pan

y (

31 D

ecem

ber

201

6)

1 -

3

mon

ths

3

-

6 m

onth

s

6 -1

2 m

onth

s

1 -

5 ye

ars

C

arry

ing

amou

nt

Cas

h an

d ca

sh e

quiv

alen

ts

933,

557

-

-

-

933,

557

Hel

d-to

-mat

urit

y se

curi

ties

855,

557

3,97

3,92

2

1,08

6,30

4

-

5,91

5,78

3

Loa

ns a

nd r

ecei

vabl

es

-

2,24

6

-

-

2,24

6

Ple

dged

ass

ets

8,71

2

69,2

59

-

77,9

71

Inve

stm

ents

in f

inan

ce le

ase

4,52

2

3,88

5

5,08

4

-

13,4

91

1,79

3,63

6

3,98

8,76

6

1,16

0,64

7

-

6,94

3,04

9

Insu

ranc

e co

ntra

ct li

abil

itie

s

322,

125

201,

642

712,

125

1,21

9,08

8

2,45

4,98

0

322,

125

201,

642

712,

125

1,21

9,08

8

2,45

4,98

0

Tot

al in

tere

st r

ate

gap

1,47

1,51

1

3,78

7,12

4

448,

522

(1,2

19,0

88)

4,48

8,06

9




Price riskEquity price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or foreign currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market.

The Company’s equity price risk exposure relates to financial assets and financial liabilities whose values will fluctuate as a result of changes in market prices, principally investment securities not held for the account of unit–linked business.

The Company’s price risk policy requires it to manage such risks by setting and monitoring objectives and constraints on investments, diversification plans, and limits on investments in each sector and market.

The Company has no significant concentration of price risk.

Operational RisksOperational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Company’s processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the Company’s operations.

The Company’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the Company’s reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.

The Company cannot expect to eliminate all operational risks, but by initiating a rigorous control framework and by monitoring and responding to potential risks, the Company is able to manage the risks. Controls include effective segregation of duties, access controls, authorisation and reconciliation procedures, staff education and assessment processes, including the use of internal audit. Business risks such as changes in environment, technology and the industry are monitored through the strategic planning and budgeting process.

The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior management within each unit. This responsibility is supported by the development of operational standards for the management of operational risk in the following areas:

- requirements for appropriate segregation of duties, including the independent authorisation of transactions

- requirements for the reconciliation and monitoring of transactions

- compliance with regulatory and other legal requirements

- documentation of controls and procedures

- requirements for the periodic assessment of operational risks and the adequacy of controls and procedures to address the risks




- requirements for the reporting of operational losses and proposed remedial action

- training and professional development

- ethical and business standards

- risk mitigation, including insurance where this is effective.

- Compliance with the Company’s standards is supported by a programme of periodic reviews undertaken by internal audit. The results of internal audit reviews are discussed with the management of the business unit to which they relate, with summaries submitted to the audit committee and senior management of the Company.

Asset - liability management (ALM)The Group is exposed to a range of financial risks through its financial assets, financial liabilities, reinsurance assets and insurance liabilities. In particular, the key financial risk is that the long- term its investment proceeds are not sufficient to fund the obligations arising from its insurance contracts.

The most important components of this financial risk are interest rate risk, equity price risk, foreign currency risk and credit risk.

These risks arise from open positions in interest rate, currency and equity products, all of which are exposed to general and specific market movements. The risks that the Group primarily faces due to the nature of its investments and liabilities are interest rate risk and equity price risk.

The Group manages these positions within an ALM framework that has been developed to achieve long-term investment returns in excess of its obligations under insurance contracts. Within the ALM framework, the Group periodically produces reports at portfolio, legal entity and asset and liability class level that are circulated to the Group’s key management personnel. The principal technique of the Group’s ALM is to match assets to the liabilities arising from insurance contracts by reference to the type of benefits payable to contract holders and for each distinct class of liabilities, a separate portfolio of assets is maintained.

The Group’s ALM is integrated with the management of the financial risks associated with the Group’s other classes of financial assets and liabilities not directly associated with insurance liabilities. In particular, the ALM Framework requires the management of interest rate risk, equity price risk and liquidity risk at the portfolio level. Foreign currency and credit risk are managed on a group-wide basis.




96

Gro

up

31

-Dec

-17

31

-Dec

-16

Sh

are

ho

lder

s'

fun

ds

Po

licy

h

old

ers'

fu

nd

s

To

tal

Sh

are

ho

lder

s'

fun

ds

Po

licy

h

old

ers'

fu

nd

s

To

tal

No

n l

ife

No

n l

ife

No

n l

ife

No

n l

ife

In t

ho

usa

nd

s o

f na

ira

Ass

ets

Cas

h a

nd

cas

h e

qu

ival

ents

-

59

9,9

66

59

9,9

66

-

93

3,5

57

93

3,5

57

Av

aila

ble

-for-

sale

sec

uri

ties

-

40

0,6

67

40

0,6

67

-

29

3,1

98

29

3,1

98

Hel

d-t

o-m

atu

rity

sec

uri

ties

3,5

01

,63

0

2,5

22

,21

7

6,0

23

,84

7

3,6

75

,02

3

2,2

40

,76

0

5,9

15,7

83

Lo

ans

and

rec

eiv

able

s

15

,52

6

15

,52

6

2,2

46

-

2,2

46

Ple

dg

ed a

sset

s

-

-

-

77

,97

1

-

77

,97

1

Tra

de

rece

ivab

les

15

,43

1

-

15

,43

1

5

,62

4

-

5,6

24

Rei

nsu

ran

ce a

sset

s 2

,31

8,2

08

-

2,3

18

,20

8

1,1

93

,72

3

- 1

,19

3,7

23

Def

erre

d a

cqu

isit

ion c

ost

7

2,1

89

-

72

,18

9

40

,61

9

- 4

0,6

19

Oth

er r

ecei

vab

les

and

p

rep

aym

ents

8

20

,49

8

- 8

20

,49

8

72

8,9

61

-

72

8,9

61

Inv

estm

ents

in

fin

ance

lea

se

20

,15

4

- 2

0,1

54

1

3,4

91

-

13

,49

1

Inv

estm

ent

pro

per

ty

36

5,0

00

-

36

5,0

00

3

08

,00

0

- 3

08

,00

0

Inta

ng

ible

ass

ets

5,1

56

-

5,1

56

3

,37

4

- 3

,37

4

Pro

per

ty a

nd

eq

uip

men

t 1

,78

6,8

34

-

1,7

86

,83

4

1,7

13

,66

0

- 1

,71

3,6

60

Sta

tuto

ry d

epo

sits

3

15

,00

0

- 3

15

,00

0

31

5,0

00

-

31

5,0

00

TO

TA

L A

SS

ET

S

6,9

17

,41

8

5,8

41

,05

8

12

,758

,47

5

6,8

83

,96

9

4,6

61

,23

8

11,5

45

,20

7

LIA

BIL

ITIE

S

Insu

ran

ce c

on

trac

t li

abil

itie

s -

3,3

72

,75

3

3,3

72,7

53

-

2,4

54,9

80

2

,45

4,9

80

Tra

de

pay

able

s 3

44

,79

5

- 3

44,7

95

2

07,4

42

-

20

7,4

42

Pro

vis

ion

s an

d o

ther

pay

able

s 4

34

,22

3

- 4

34,2

23

5

93,7

82

-

59

3,7

82

Cu

rren

t i

nco

me

tax

lia

bil

itie

s 2

79

,87

8

- 2

79,8

78

3

58,9

10

-

35

8,9

10

Def

erre

d t

ax l

iab

ilit

ies

511

,69

3

- 5

11,6

93

3

66,1

59

-

36

6,1

59

TO

TA

L L

IAB

ILIT

IES

1

,57

0,5

89

3

,37

2,7

53

4

,94

3,3

41

1

,52

6,2

93

2

,45

4,9

80

3

,98

1,2

74

GA

P

5,3

46

,82

9

2,4

68

,30

5

7,8

15,1

34

5

,35

7,6

76

2

,20

6,2

58

7

,56

3,9

33




Com

pan

y

31-D

ec-1

7

31-D

ec-1

6

Sh

areh

old

ers'

fu

nd

s

Pol

icy

hol

der

s'

fun

ds

T

otal

Sh

areh

old

ers'

fu

nd

s

Pol

icy

hol

der

s'

fun

ds

T

otal

N

on l

ife

N

on l

ife

Non

lif

e

Non

lif

e

In t

hous

ands

of

nair

a

AS

SE

TS

Cas

h an

d ca

sh e

quiv

alen

ts

-

597,

985

597,

985

-

932,

970

932,

970

Ava

ilab

le-f

or-s

ale

secu

riti

es

-

400,

667

400,

667

-

293,

198

293,

198

Hel

d-to

-mat

urit

y se

curi

ties

3,50

1,63

0

2,52

2,21

7

6,02

3,84

7

3,67

5,02

3

2,24

0,76

0

5,91

5,78

3L

oans

and

rec

eiva

bles

15,5

26

-

15,5

26

2,24

6

-

2,24

6P

ledg

ed a

sset

s

-

-

-

77,9

71

-

77,9

71T

rade

rec

eiva

bles

15,4

31

-

15,4

31

5,62

4

-

5,62

4R

eins

uran

ce a

sset

s

2,31

8,20

8

2,

318,

208

1,19

3,72

3

-

1,19

3,72

3D

efer

red

acqu

isit

ion

cost

72,1

89

-

72,1

89

40,6

19

-

40,6

19O

ther

rec

eiva

bles

and

pr

epay

men

ts

817,

509

-

817,

509

724,

209

-

724,

209

Inve

stm

ents

in

fina

nce

leas

e

20,1

54

-

20,1

54

13,4

91

-

13,4

91In

vest

men

t in

sub

sidi

ary

1,00

0

-

1,00

0

1,00

0

-

1,00

0In

vest

men

t pr

oper

ty

365,

000

-

365,

000

308,

000

-

308,

000

Inta

ngib

le a

sset

s

5,15

6

-

5,15

6

3,37

4

-

3,37

4P

rope

rty

and

equi

pmen

t

1,78

6,83

4

-

1,78

6,83

4

1,71

3,66

0

-

1,71

3,66

0S

tatu

tory

dep

osit

s

315,

000

-

315,

000

315,

000

-

315,

000

6,91

5,24

9

5,83

9,07

7

12,7

54,5

05

6,88

0,21

7

4,66

0,65

1

11,5

40,8

66L

IAB

ILIT

IES

Insu

ranc

e co

ntra

ct l

iabi

liti

es

-

3,37

2,75

3

3,37

2,75

3

-

2,45

4,98

0

2,45

4,98

0T

rade

pay

able

s

344,

795

-

344,

795

207,

442

-

207,

442

Pro

visi

ons

and

othe

r pa

yabl

es

481,

781

-

481,

781

637,

723

-

637,

723

Cur

rent

inc

ome

tax

lia

bili

ties

277,

521

-

277,

521

357,

565

-

357,

565

Def

erre

d ta

x li

abil

itie

s

511,

693

-

511,

693

366,

158

-

366,

158

TO

TA

L L

IAB

ILIT

IES

1,61

5,79

1

3,37

2,75

3

4,98

8,54

3

1,

568,

888

2,45

4,98

0

4,02

3,86

8

GA

P

5,61

5,79

0

2,46

6,32

4

7,76

5,96

2

5,

311,

239

2,20

5,67

1

7,51

7,00

0




8 Financial assets and liabilities

Determination of fair valueThe determination of fair value for each class of financial instruments was based on the particular characteristic of the instruments. The determination of fair value for financial assets and financial liabilities for which there is no observable market price requires the use of certain valuation techniques.

For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgment depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument. The method and assumptions applied are enumerated below:

Cash and cash equivalentThe estimated fair value of fixed interest placement with banks is based on the prevailing money market interest rates and remaining maturity.

Quoted securities (Available-for-Sale)The fair value for treasury bills and quoted equities is based on market prices or brokers/dealers price quotations. Where this information is not available, fair valuation is estimated using quoted market prices for securities with similar credit, maturity and yield characteristics.

Insurance liabilitiesSee note 4r on insurance risk for method and assumptions used to determine the fair value of non-life insurance contracts.

Trade receivables and payables, reinsurance receivables and other payablesThe estimated fair value of receivables and payables with no stated maturity which includes no interest payables and receivables is the amount repayable or to receive on demand.

The Company measures fair value using the following fair value hierarchy that reflects the significance of the inputs used in making the measurement.

Level 1: Quoted market price in an active market for an identical instrument.

Level 2: Valuation techniques based on observable inputs. This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3: This includes financial instruments, the valuation of which incorporates significant inputs for the asset or liability that is not based on observable market data (unobservable inputs). Unobservable inputs are those not readily available in an active market due to market illiquidity or complexity of the product. These inputs are generally determined based on inputs of a similar nature, historic observations on the level of the input or analytical techniques.

Accounting classification measurement basis and fair valueThe table below analyses financial instruments measured at fair value at the end of the year, by the level in the fair value hierarchy into which the fair value measurement is categorised.




Fin

anci

al a

sset

s m

easu

red a

t fa

ir v

alue

31 D

ecem

ber

2017

Lev

el

1

Lev

el 2

Lev

el 3

T

ota

l b

ala

nce

Gro

up

Note

In t

housa

nds

of

nair

a

Ass

ets

Avai

lable

-for-

sale

fin

anci

al a

sset

s

25

370,1

67

-

-

370,1

67

Tota

l fi

nan

cial

ass

ets

mea

sure

d a

t fa

ir v

alue

370,1

67

-

- 370,1

67

Fin

anci

al a

sset

s m

easu

red a

t fa

ir v

alue

31 D

ecem

ber

2017

Lev

el 1

L

evel

2

Lev

el 3

T

ota

l b

ala

nce

Com

pan

y

Note

In t

housa

nds

of

nair

a

Ass

ets

Avai

lable

-for-

sale

fin

anci

al a

sset

s 25

370,1

67

-

- 370,1

67

Tota

l fi

nan

cial

ass

ets

mea

sure

d a

t fa

ir v

alue

370,1

67

-

- 370,1

67

31 D

ecem

ber

2016

Lev

el 1

L

evel

2

Lev

el 3

T

ota

l b

ala

nce

Gro

up

N

ote

In t

housa

nds

of

nair

a

Ass

ets

Avai

lable

-for-

sale

fin

anci

al a

sset

s 25

262,6

98

-

- 262,6

98

Tota

l fi

nan

cial

ass

ets

mea

sure

d a

t fa

ir v

alue

262,6

98

-

- 262,6

98

31 D

ecem

ber

2016

Lev

el 1

L

evel

2

Lev

el 3

T

ota

l b

ala

nce

Com

pan

y

Note

In t

housa

nds

of

nair

a

Ass

ets

Avai

lable

-for-

sale

fin

anci

al a

sset

s 25

262,6

98

-

- 262,6

98

Tota

l fi

nan

cial

ass

ets

mea

sure

d a

t fa

ir v

alue

262,6

98

-

- 262,6

98

The

table

bel

ow

anal

yse

s fi

nan

cial

inst

rum

ents

not

mea

sure

d a

t fa

ir v

alue

at t

he

end o

f th

e yea

r. T

he

carr

yin

g a

mount

of

thes

e fi

nan

cial

inst

rum

ents

are

appro

xim

atio

ns

of

thei

r fa

ir v

alues

.




Gro

up

Gro

up

Co

mp

an

yC

om

pa

ny

31

-Dec

-17

31-D

ec-1

73

1-D

ec-1

73

1-D

ec-1

7

No

te

C

arr

yin

g

va

lue

Fa

ir v

alu

e

C

arr

yin

g

va

lue

Fa

ir v

alu

e

In t

ho

usa

nd

s o

f n

air

a

Ass

ets

Cas

h a

nd

cas

h e

qu

ival

ents

24

59

7,9

85

59

7,9

85

59

7,9

85

59

7,9

85

Hel

d-t

o-m

atu

rity

sec

uri

ties

26

6,0

23

,84

7

6,0

23,8

47

6,0

23

,84

7

6,0

23

,84

7

Lo

ans

and

rec

eiv

able

s

27

15

,52

6

15

,52

6

15

,52

6

15

,52

6

Ple

dg

ed a

sset

s

28

-

-

-

-

Inv

estm

ent

in E

ner

gy

&

All

ied

In

sura

nce

Po

ol

of

Nig

eria

25

b

30

,50

0

30

,50

0

30

,50

0

30

,50

0

Tra

de

rece

ivab

les

29

15

,43

1

15

,43

1

15

,43

1

15

,43

1

Rei

nsu

ran

ce a

sset

(ex

clu

din

g p

rep

aid

rei

nsu

ran

ce)

30

1,8

27

,38

4

1,8

27,3

84

1,8

27

,38

4

1,8

27

,38

4

Oth

er r

ecei

vab

les

(ex

clu

din

g p

rep

aym

ents

)

32

811

,82

8

811

,82

8

811

,82

8

811

,82

8

To

tal

val

ue

of

fin

anci

al a

sset

s n

ot

mea

sure

d a

t fa

ir v

alu

e

9

,32

2,5

02

9,3

22,5

02

9,3

22

,50

2

9,3

22

,50

2

Tra

de

pay

able

s

40

34

4,7

95

34

4,7

95

34

4,7

95

34

4,7

95

Oth

er p

ayab

les

41

43

4,2

23

43

4,2

23

43

4,2

23

43

4,2

23

To

tal

val

ue

of

fin

anci

al l

iab

ilit

ies

no

t m

easu

red

at

fair

v

alu

e

7

79

,01

8

77

9,0

18

82

6,5

76

82

6,5

76




Gro

up

G

rou

p

Com

pan

y

Com

pan

y

31

-Dec

-16

31-D

ec-1

6 3

1-D

ec-1

6

31

-Dec

-16

C

arr

yin

g

valu

e

Fair

valu

e

Carr

yin

g

valu

e

Fair

valu

e

Note

In

thousa

nds

of

nair

a

A

sset

s

C

ash a

nd c

ash e

quiv

alen

ts

24

933,5

57

933,5

57

932,9

70

932,9

70

H

eld

-to

-mat

uri

ty s

ecuri

ties

26

5,9

15,7

83

5,9

15,7

83

5,9

15,7

83

5,9

15,7

83

L

oan

s an

d r

ecei

vab

les

27

2,2

46

2,2

46

2,2

46

2,2

46

P

ledged

ass

ets

28

77,9

71

77,9

71

77,9

71

77,9

71

In

ves

tmen

t in

Ener

gy &

All

ied I

nsu

rance

Pool

of

Nig

eria

25b

30,5

00

30,5

00

30,5

00

30,5

00

Tra

de

rece

ivab

les

29

5,6

24

5,6

24

5,6

24

5,6

24

Rei

nsu

rance

ass

et (

excl

udin

g p

repai

d r

einsu

rance

)

30

877,5

20

877,5

20

877,5

20

877,5

20

Oth

er r

ecei

vab

les

(excl

udin

g p

repay

men

ts)

32

715,1

11

715,1

11

710,3

58

710,3

58

Tota

l val

ue

of

finan

cial

ass

ets

not

mea

sure

d a

t fa

ir v

alue

8,5

58,3

12

8,5

58,3

12

8,5

52,9

72

8,5

52,9

72

Tra

de

pay

able

s

40

207,4

42

207,4

42

207,4

42

207,4

42

Oth

er p

ayab

les

41

593,7

82

593,7

82

637,7

23

637,7

23

T

ota

l val

ue

of

finan

cial

lia

bil

itie

s not

mea

sure

d a

t fa

ir

val

ue

801,2

24

801,2

24

845,1

65

845,1

65




9 Segment reportingSegment information is presented in respect of the Group’s business segments which represents the primary segment reporting format and is based on the Group’s management and reporting structure.Based on the evaluation of the Company’s operations, management has determined that it has only one reportable segment since the Company does not manage its operations by allocating resources based on a determination of the contribution to net income from product, service or operation. The Company’s subsidiary does not qualify as a reportable segment as it does not meet the quantitative threshold required for segment reporting.

The products and services from which the Company derives its revenue are mainly the provision of risk underwriting and related financial services to its customers. Such services include provision of general insurance services to both corporate and individual customers and the products are distributed through various forms of brokers, agencies and direct marketing programmes. Revenue from this segment is derived primarily from insurance premiums, fee income, investment income and net realised gains on financial assets.

Management identifies its reportable operating segment based on the Group’s management and reporting structure.

The segment information provided to the strategic steering committee for the reportable segments for the year end is as follows:

General insurance business 31-Dec-

2017 31-Dec-

2016

Revenue from external customers:

? '000

? '000

Gross insurance premium revenue

2,486,736

1,929,287

Insurance premium ceded to reinsurers

(1,302,944) (1,055,959)

Net insurance premium revenue

1,183,792

874,421

Fee and commission income

247,916

216,601

Investment and other income

1,144,548

1,332,661

2,576,257

2,423,683

Reportable segment profit before tax

818,041

1,545,133

Assets and liabilities:

Total assets

12,758,476

11,540,867

Total liabilities

4,943,341

4,023,867

Net assets

7,815,135

7,517,000




The revenue from external parties reported to the strategic steering committee is measured in a manner consistent with that in the income statement.

The amounts provided to segment information with respect to total assets and total liabilities are measured in a manner consistent with that of the financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset.

Geographical segmentNigeria is the Company's primary geographical segment as all the Company's income is derived in Nigeria. Accordingly, no further geographical segments information is reported.

10 Gross premium written Group Company

31-Dec-2017

31-Dec-2016

31-Dec-2017

31-Dec-2016

Gross insurance premium revenue (see note 11) 2,486,736 1,929,287 2,486,736 1,929,287

11 Gross premium income

The insurance premium income is analysed as follows:

Short-term insurance contracts: Gross premium (see note 10) 2,486,736 1,929,287 2,486,736 1,929,287 Decrease in unearned premium (see note 39(b)(ii)) (184,945) 153,872 (184,945) 153,872

Premium income arising from insurance contracts issued 2,301,791 2,083,159 2,301,791 2,083,159

31 December 2017 Group and Company Gross

premium written

Unearned premium

Gross premium

earned

Fire 713,014 (32,343) 680,671 General accident 445,033 (37,980) 407,054 Motor 520,426 6,571 526,997 Marine 159,577 (41,848) 117,729 Bond 22,000 (5,366) 16,634 Engineering 166,573 (45,104) 121,469 Oil and energy 460,113 (28,875) 431,238

2,486,736

(184,945)

2,301,791



Notes to the Consolidated and Separate Financial Statements Cont’d 31 D

ecem

ber

2016

G

rou

p a

nd

Com

pan

y

Gro

ss

pre

miu

m

wri

tten

U

nea

rned

pre

miu

m

Gro

ss

pre

miu

m

earn

ed

12

R

ein

sura

nce

exp

ense

s

Gro

up

Co

mp

an

y

31

-Dec

-201

7

31

-Dec

-20

16

3

1-D

ec-2

01

7

31

-Dec

-20

16

R

einsu

rance

pre

miu

m

(1,4

90,7

72)

(88

4,7

56)

(1

,49

0,7

72

) (8

84

,75

6)

M

& D

pre

miu

m p

aym

ent

amort

ized

(se

e n

ote

3

0(b

))

47,2

44

(4

8,8

98)

4

7,2

44

(4

8,8

98)

(1

,44

3,5

28)

(93

3,6

54)

(1

,44

3,5

28

) (9

33

,65

4)

In

crea

se/(

Dec

reas

e) i

n p

rep

aid

rei

nsu

rance

p

rem

ium

(S

ee n

ote

30(b

))

14

0,5

84

(1

22

,30

5)

1

40

,584

(1

22

,30

5)

P

rem

ium

rev

enu

e ce

ded

to

rei

nsu

rers

on

in

sura

nce

co

ntr

acts

iss

ued

(1

,30

2,9

44)

(1,0

55

,959

)

(1,3

02,9

44

) (1

,055

,95

9)

Rei

nsu

ran

ce p

rem

ium

:

Ced

ed L

oca

l

(1,0

35,7

45)

(69

3,3

60)

(1

,03

5,7

45

) (6

93

,36

0)

C

eded

ab

road

(4

07,7

83

) (2

40

,29

4)

(4

07,7

83

) (2

40

,29

4)

To

tal

(1

,44

3,5

28)

(93

3,6

54)

(1

,44

3,5

28

) (9

33

,65

4)

Fire

G

ener

al a

ccid

ent

Mot

or

Mar

ine

Bon

d E

ngin

eeri

ng

Oil

and

Gas

504,

696

1,71

1 50

6,40

7 34

1,77

7 3,

615

345,

392

559,

673

26,2

27

585,

900

91,9

28

12,9

19

104,

847

11,7

36

(1,2

59)

10,4

77

133,

162

32,5

34

165,

696

286,

315

78,1

24

364,

439

1,92

9,28

7

153,

871

2,08

3,15

9




13

C

om

mis

sion

in

com

e

R

einsu

rance

com

mis

sion

2

99,7

61

17

8,8

29

29

9,7

61

1

78

,82

9

D

efer

red

co

mm

issi

on i

nco

me

(5

1,8

45

) 3

7,7

71

(51,8

45

) 37

,77

1

2

47,9

16

21

6,6

01

24

7,9

16

2

16

,60

1

14

In

ves

tmen

t in

com

e

In

tere

st I

nco

me

on h

eld t

o m

aturi

ty i

nv

estm

ent

secu

riti

es

84

3,2

73

49

5,7

05

84

3,2

73

4

95

,70

5

In

tere

st I

nco

me

on c

ash

and

cas

h e

qu

ival

ents

6

6,7

39

8

4,2

96

66,7

39

84

,29

6

In

tere

st I

nco

me

on p

ledg

ed a

sset

s 4,7

99

5

,176

4,7

99

5

,17

6

In

tere

st I

nco

me

on s

tatu

tory

Dep

osi

ts

47,5

16

3

2,1

65

47,5

16

32

,16

5

In

tere

st o

n l

ease

5,2

05

6

,252

5,2

05

6

,25

2

D

ivid

end i

nco

me

on a

vai

lable

-for-

sale

sec

uri

ties

1

7,9

15

2

4,1

31

17,9

15

24

,13

1

9

85,4

46

64

7,7

25

98

5,4

46

6

47

,72

5

Inv

estm

ent

inco

me

is a

ttri

bu

table

to:

Shar

eho

lder

s' f

und

s 5

24,0

48

33

2,0

01

52

4,0

48

3

32

,00

1

P

oli

cyho

lder

s' f

und

s 4

61,3

98

31

5,7

24

46

1,3

98

3

15

,72

4

9

85,4

46

64

7,7

25

98

5,4

46

6

47

,72

5

15

(a)

Net

ga

ins

on

fo

reig

n e

xch

an

ge

tran

slati

on

Net

gai

ns/

(lo

sses

) on

tra

nsl

atio

n o

f fo

reig

n

curr

ency

tra

nsa

ctio

ns

54,0

45

63

0,4

97

54,0

45

6

30

,49

7

15

(b)

Net

fa

ir v

alu

e ga

ins

on

ass

ets

at

fair

valu

e th

rou

gh

pro

fit

or

loss

F

air

val

ue

gai

ns

on i

nves

tmen

t p

rop

erty

(se

e no

te

35)

57,0

00

-

5

7,0

00

-

Grou

p

C

om

pan

y

31

-Dec-

20

17

31

-Dec-

2016

3

1-D

ec-

20

17

31

-Dec-

2016




16

Oth

er o

per

ati

ng i

nco

me

Ren

tal

inco

me

2

4,2

22

31

,693

22

,042

31

,69

3

Pro

fit

on

dis

posa

l of

pro

per

ty a

nd

equ

ipm

ent

3,0

15

1

,554

3,0

15

1,5

54

Fee

in

com

e

3,2

52

20

,477

3,2

52

20

,47

7

Oth

er i

nco

me

32

2

,681

32

7

16

Sun

dry

in

com

e1

7,5

36

-17

,536

48,0

57

56

,404

45

,877

54

,43

9

18U

nd

erw

riti

ng

exp

ense

s

Un

der

wri

ting

exp

ense

s co

mpr

ise

acq

uis

itio

n a

nd

mai

nten

ance

ex

pen

ses.

Acq

uis

itio

n e

xpen

ses

are

thos

e in

curr

ed i

n

orig

inat

ing

ins

ura

nce

co

ntr

acts

. T

hey

incl

ud

e co

mm

issi

ons

or

bro

kera

ge

paid

to

ag

ents

or

brok

ers

and

oth

er i

nd

irec

t ex

pen

ses.

Mai

nte

nan

ce e

xpen

ses

are

tho

se in

curr

ed in

ser

vic

ing

exis

ting

pol

icie

s/co

ntr

acts

. The

se in

clu

de

pro

cess

ing

co

st,

prep

arat

ion

of s

tati

stic

al a

nd

rep

ort

s, a

nd

oth

er in

cide

ntal

co

sts

attr

ibu

tab

le to

mai

nte

nan

ce.

Gro

up

Com

pan

y

17

Cla

ims

exp

ense

s

31

-Dec

-31

-Dec

-

31

-Dec

-31

-Dec

-

C

laim

s pai

d 996,0

78

1,0

77

,605

99

6,0

78

1,0

77,6

05

O

uts

tand

ing c

laim

s (s

ee n

ote

39 a

(ii)

) 732,8

27

15

6,9

86

73

2,8

27

15

6,9

86

Tota

l cl

aim

s an

d l

oss

adju

stm

ent

exp

ense

s 1,7

28,9

05

1,2

34

,591

1,7

28

,90

5 1,2

34,5

91

R

eco

ver

able

fro

m r

e-in

sure

rs (1

,43

6,9

56)

(879

,376)

(1

,436,9

56)

(879

,376)

Net

cla

ims

and l

oss

adju

stm

ent

expen

ses

291,9

49

35

5,2

15

29

1,9

49

35

5,2

15

-

Grou

p

C

om

pan

y

31

-Dec-

201

7

31

-Dec-

201

6

3

1-D

ec-

201

7

31

-Dec-

201

6




Gro

up

Com

pan

y

31

-Dec

-2017

31

-Dec

-2016

31

-Dec

-2017

31

-Dec

-2016

(a

) A

cqu

isit

ion

exp

ense

s

Com

mis

sions

292,1

99

170,3

99

292,1

99

170,3

99

Oth

er a

cquis

itio

n c

ost

102,1

33

79,5

34

102,1

33

79,5

34

Insu

rance

sta

ff c

ost

s 288,2

63

216,3

02

288,2

63

216,3

02

682,5

94

466,2

35

682,5

94

466,2

35

Dec

reas

e in

def

erre

d a

cquis

itio

n c

ost

(se

e note

31(b

))

(31,5

70)

(7,6

44)

(3

1,5

70)

(7,6

44)

651,0

24

458,5

91

651,0

24

458,5

91

(b)

Main

ten

an

ce e

xp

ense

s -

-

- -

Insu

rance

sta

ff c

ost

s re

pre

sent

under

wri

ting s

taff

sal

arie

s fo

r th

e yea

r.

19

E

mp

loyee

ben

efit

exp

ense

s

Non-i

nsu

rance

sta

ff c

ost

s 196,3

23

154,6

01

196,3

23

154,6

01

(a)

Em

plo

yee

cost

s, i

ncl

udin

g t

he

exec

uti

ve

dir

ecto

r duri

ng t

he

yea

r:

S

hort

-ter

m b

enef

its

177,5

84

134,6

42

177,5

84

134,6

42

Pen

sio

n c

osts

–

d

efi

ned

co

ntr

ibu

tio

n p

lan

15,4

17

12,3

21

15,4

17

12,3

21

Oth

er l

ong

-ter

m b

enef

its

3,3

22

7,6

38

3,3

22

7,6

38

196,3

23

154,6

01

196,3

23

154,6

01




20

O

ther

op

erati

ng e

xp

ense

s

R

epai

rs a

nd m

ainte

nan

ce

57,6

46

56,2

90

57,6

46

56,2

90

Adm

inis

trat

ion e

xpen

ses

50,3

63

11

,477

50,3

63

11

,477

Sta

tioner

ies

& p

erio

dic

als

35,1

12

18,3

79

35,1

12

18,3

79

Ele

ctri

city

& P

ow

er

10,6

11

9,8

57

10,6

11

9,8

57

Insu

rance

expen

ses

11,8

68

6,3

15

11,8

68

6,3

15

Audit

ors

' rem

uner

atio

n

19,5

00

22,0

00

19,5

00

22,0

00

Dir

ecto

rs' r

emuner

atio

n (

see

note

49(b

)(i)

) 22,6

10

21,0

68

22,6

10

21,0

68

Pro

fess

ional

fee

s 41,4

14

31,1

50

41,4

14

31,1

50

Ban

k C

har

ges

16,0

62

11

,209

16,0

62

11

,209

Ren

t an

d R

ates

21,0

66

15,6

37

21,0

66

15,6

37

Super

vis

ory

lev

y

14,4

34

21,0

70

14,4

34

21,0

70

Corp

ora

te a

dver

t 27,3

74

14,5

83

27,3

74

14,5

83

Oth

er m

anag

emen

t ex

pen

ses

9,5

91

12,9

30

10,9

09

5,3

83

337,6

49

251,9

64

338,9

68

244,4

17

2

1

Net

wri

te-b

ack

of

imp

air

men

t on

fin

an

cial

an

d o

ther

ass

ets

G

rou

p

C

om

pa

ny

31

-Dec

-2017

31

-Dec

-2

016

3

1-D

ec-

2017

31

-Dec

-2

016

U

nquote

d s

ecuri

ty

wri

tten

off

(2

,00

0)

-

(2,0

00)

-

Wri

te-b

ack o

f/ad

dit

ional

(im

pai

rmen

t) o

n d

oubtf

ul

loan

s an

d

rece

ivab

les

(note

21(a

))

(18

,96

8)

181

(18

,968)

181

L

oss

on d

isposa

l of

Fin

anci

al a

sset

s (n

ote

21(b

))

(12

,37

3)

-

(12

,373)

-

(3

3,3

42)

181

(33

,342)

181

Gro

up

Com

pan

y

31

-Dec

-2017

31

-Dec

-2016

31

-Dec

-2017

31

-Dec

-2016




2

1(a

) W

rite

-ba

ck o

f/ad

dit

ion

al

(im

pa

irm

ent)

on

dou

btf

ul

loa

ns

an

d

rece

ivab

les

Im

pai

rmen

t w

rite

bac

k o

n f

inan

ce l

ease

-

181

- 181

Rec

over

ies

du

ring t

he

yea

r (

see

note

27

c)

300

-

300

-

Im

pai

rmen

t -

oth

er r

ecei

vab

le (

see

no

te 3

2b

) (1

9,2

68)

(1

9,2

68)

-

(18

,96

8)

181

(18

,96

8)

181

21

(b)

Net

(lo

ss)

on

dis

po

sal

of

fin

an

cial

ass

ets

A

t fa

ir v

alue:

Qu

ote

d e

qu

itie

s

S

old

8

1,6

77

-

81,6

77

-

co

st

94,0

50

-

94,0

50

-

(1

2,3

73)

-

(12

,37

3)

-

22

In

com

e ta

x e

xp

ense

The

tax

char

ge

for

the

yea

r co

mpri

ses:

C

om

pan

y i

nco

me

tax

2

20

,37

2

290

,044

219

,19

2

289,7

96

Ter

tiar

y e

duca

tion

tax

1

6,4

81

20,5

70

16,4

02

2

0,5

70

NIT

DA

lev

y

7,9

72

13,1

61

7,9

72

1

3,1

61

2

44

,82

5

323

,775

243

,56

6

323,5

27

Def

erre

d t

ax (

cred

it)/

char

ge

145

,53

5

204

,841

145

,53

5

204,8

66

3

90

,360

528

,617

389

,10

1

528,3

94

23E

arn

ings

per

sh

are

- Bas

ic

Bas

ic e

arn

ing

s pe

r sh

are

is c

alcu

late

d b

y di

vidi

ng th

e pr

ofit

att

ribu

tab

le to

eq

uit

y h

olde

rs o

f the

Co

mpa

ny b

y th

e w

eig

hte

d av

erag

e n

um

ber

of o

rdin

ary

shar

es in

issu

e d

uri

ng

the

yea

r.

Gro

up

Com

pan

y

31

-Dec

-2017

31

-Dec

-2016

31

-Dec

-2017

31

-Dec

-2016




Gro

up

Co

mp

an

y

3

1-D

ec-

2017

31

-Dec

-201

6

31

-Dec

-201

7

31

-Dec

-201

6

Pro

fit

attr

ibuta

ble

to t

he

Com

pan

y’s

equit

y h

old

ers

(N'0

00)

427

,681

780

,938

425,4

42

786

,905

Wei

ghte

d a

ver

age

nu

mber

of

ord

inar

y s

har

es i

n i

ssue

('0

00

) 3,3

00

,00

0

3,3

00

,00

0

3,3

00,0

00

3

,30

0,0

00

B

asic

ear

nin

gs

per

shar

e (k

ob

o)

13

2

4

13

2

4

24

C

ash

an

d c

ash

eq

uiv

ale

nts

Cas

h a

nd c

ash

equiv

alen

ts c

om

pri

se:

Cas

h i

n h

and

17,7

25

27,2

20

17,7

25

2

7,2

20

Bal

ance

s h

eld w

ith

ban

ks

in N

iger

ia

198

,250

151

,077

198,2

50

151

,077

Bal

ance

s h

eld w

ith

ban

ks

outs

ide

Nig

eria

2,5

10

2

0

2,5

10

2

0

P

lace

men

ts w

ith f

inan

cial

inst

ituti

ons

381

,48

1

755

,240

379,5

00

754

,653

599

,966

933

,557

597,9

85

932

,970

Pla

cem

ents

wit

h fi

nanc

ial

inst

itut

ions

are

mad

e fo

r v

aryi

ng p

erio

ds o

f b

etw

een

one

day

and

thr

ee m

onth

s de

pend

ing

on t

he

imm

edia

te c

ash

requ

irem

ents

of t

he

Gro

up

.

25

Avail

ab

le-f

or-

sale

sec

uri

ties

G

rou

p

C

om

pan

y

a

Equ

ity

secu

riti

es

31

-Dec

-2017

31-D

ec-

2016

31-D

ec-

201

7

31-D

ec-

201

6

A

t fa

ir v

alu

e: Q

uote

d e

quit

ies

C

ost

376,1

30

470

,180

376

,130

470,1

80

F

air

val

ue

adju

stm

ent

(6,0

37)

(209,4

82)

(6,0

37)

(209,4

82)

370,0

93

260

,698

370

,093

260,6

98

A

t co

st:

Unq

uote

d e

quit

ies

Cost

24,8

66

26,7

92

24,8

66

26,7

92

I

mpai

rmen

t al

low

ance

(24,7

92)

(24,7

92)

(24,7

92)

(24,7

92)

74

2,0

00

74

2,0

00

N

et a

vai

lable

-for-

sale

sec

uri

ties

370,1

67

262

,698

370

,167

262,6

98




b

Inves

tmen

t in

En

ergy

& A

llie

d I

nsu

ran

ce P

oo

l o

f N

iger

ia

In

ves

tmen

t in

Ener

gy &

All

ied I

nsu

rance

Pool

of

Nig

eria

30,5

00

30,5

00

30,5

00

30,5

00

400,6

67

293

,198

400

,667

293,1

98

26

H

eld

-to

-matu

rity

sec

uri

ties

Quote

d d

ebt

secu

riti

es -

Tre

asury

Bil

ls

4,6

44,7

61

4

,390,7

76

4,6

44,7

61

4,3

90,7

76

Quote

d d

ebt

secu

riti

es -

FG

N B

ond

100,1

57

-

10

0,1

57

-

P

lace

men

ts w

ith f

inan

cial

inst

ituti

ons

in N

iger

ia (

> t

hre

e m

onth

s)

649,1

95

7

97,5

36

64

9,1

95

797,5

36

Pla

cem

ents

wit

h f

inan

cial

inst

ituti

ons

outs

ide

Nig

eria

(>

th

ree

month

s)

629,7

34

7

27,4

71

62

9,7

34

727,4

71

Tota

l hel

d-t

o-m

aturi

ty s

ecuri

ties

6,0

23,8

47

5

,915,7

83

6,0

23,8

47

5,9

15,7

83

Q

uote

d d

ebt

secu

riti

es -

Tre

asu

ry B

ills

& B

on

d

At

1,J

anuar

y

4,3

90,7

75

4,6

41,2

40

4,3

90,7

75

4,6

41,2

40

Addit

ions

duri

ng t

he

yea

r

96,3

42

523,4

61

96,3

42

523

,461

Inte

rest

cap

ital

ised

804,4

58

470,3

53

80

4,4

58

470

,353

Red

empti

on

duri

ng t

he

yea

r

(54

6,6

57)

(1,2

44,2

79)

(546,6

57)

(1,2

44,2

79)

A

t 3

1 D

ecem

ber

4,7

44,9

18

4,3

90,7

75

4,7

44,9

18

4,3

90

,775

P

lace

men

ts w

ith

fin

an

cial

inst

itu

tion

s

At

1,J

anuar

y

1,5

25,0

07

731,4

46

1,5

25,0

07

731

,446

Addit

ions

duri

ng t

he

yea

r

408,7

73

447,5

20

40

8,7

73

447

,520

Inte

rest

cap

ital

ised

38,8

16

2

5,3

52

38,8

16

25

,352

Fore

x g

ain

on a

sset

s

- 381,3

51

-

381

,351

Red

empti

on

duri

ng t

he

yea

r

(69

3,6

66)

(60,6

61)

(693,6

66)

(60,6

61)

A

t 3

1 D

ecem

ber

1,2

78,9

30

1,5

25,0

07

1,2

78,9

30

1,5

25,0

07

Gro

up

Co

mp

an

y

31

-Dec-

201

7 3

1-D

ec-

20

16

31

-Dec-

201

7

31

-Dec-

201

6




27

Loan

s an

d r

ecei

vab

les

G

rou

p

C

om

pan

y

31-D

ec-

2017

31-D

ec-

2016

31-D

ec-

2017

31-D

ec-

2016

(a

) C

om

mer

cial

loan

s

A

t 1

,Jan

uar

y

87,1

67

87,4

67

87,1

67

87,4

67

S

pec

ific

im

pai

rmen

t of

com

mer

cial

loan

s (S

ee n

ote

(c)

bel

ow

)

(87,1

67)

(87,4

67)

(87,1

67)

(87,4

67)

A

t 31 D

ecem

ber

- -

- -

(b)

Sta

ff l

oan

s

-

A

t 1

,Jan

uar

y

2,2

46

3,6

51

2,2

46

3,6

51

A

ddit

ions

duri

ng t

he

yea

r

77,3

82

37,5

22

77,3

82

37,5

22

P

aym

ent

rece

ived

duri

ng t

he

yea

r

(64,1

02)

(38,9

27)

(64,1

02)

(38,9

27)

A

t 31 D

ecem

ber

15,5

26

2,2

46

15,5

26

2,2

46

(c

) M

ovem

ent

in s

pec

ific

all

ow

an

ces

for

imp

air

men

t

At

1 J

anuar

y

87,4

67

87,4

67

87,4

67

87,4

67

R

ecover

ies

duri

ng t

he

yea

r (

see

note

21)

(3

00)

- (3

00)

-

At

31 D

ecem

ber

87,1

67

87,4

67

87,1

67

87,4

67

28

Ple

dge

d a

sset

s

Ple

dg

ed a

sset

s re

pre

sen

t ass

ets

tran

sfer

red

as

adva

nce

pay

men

t gua

rant

ee to

pro

vid

ers

of

sho

rt-t

erm

bo

rro

win

gs

(Zen

ith

Ban

k an

d S

tan

dar

d C

hart

ered

Ban

k)

for

the

Com

pany

's c

lien

ts. T

he d

ebt p

rov

ider

s m

ain

tain

po

sses

sion

of

the

ple

dg

ed a

sset

s b

ut d

o

no

t hav

e o

wn

ersh

ip u

nle

ss th

ere

is a

def

ault

. Ple

dged

ass

ets

are

mea

sure

d a

t am

ort

ized

cos

t as

at y

ear

end

. Th

e o

bli

gati

ons

over

w

hic

h th

e p

ledg

ed a

sset

wer

e he

ld m

atur

ed d

urin

g th

e ye

ar.

Th

e na

ture

an

d c

arry

ing

am

ount

of

the

pled

ged

ass

et a

re a

s fo

llow

s:




Gro

up

C

om

pa

ny

3

1-D

ec-

20

17

31

-Dec

-2

01

6

31

-Dec

-2

01

7

31

-Dec

-2

01

6

At

1,J

anu

ary

7

7,9

71

8

7,1

65

7

7,9

71

8

7,1

65

Inte

rest

cap

ital

ized

-

114

-

114

Red

emp

tio

n d

uri

ng

the

yea

r

(7

7,9

71)

(1

2,5

66

)

(7

7,9

71)

(1

2,5

66)

Fo

rex

gai

n o

n f

air

val

ue

-

3,2

58

-

3,2

58

-

77,9

71

-

77,9

71

The

finan

cial

in

stit

uti

on

s ar

e:

Zen

ith

Ban

k P

lc

-

8

,71

2

-

8

,71

2

Sta

nd

ard

Ch

arte

red

Ban

k L

imit

ed

-

6

9,2

59

-

69,2

59

-

77,9

71

-

77,9

71

29

T

rad

e re

ceiv

ab

les

In

sura

nce

rec

eiva

ble

s:

Due

fro

m p

oli

cy h

old

ers

4

03

,78

4

50,1

93

4

03

,78

4

50,1

93

Due

fro

m b

rok

ers

-

23

8,7

00

-

2

38

,70

0

D

ue

fro

m a

gen

ts

-

1

05

,08

3

-

105

,08

3

403

,78

4

39

3,9

76

403

,78

4

393

,97

6

L

ess:

im

pai

rmen

t o

f re

ceiv

able

s fr

om

co

ntr

act

ho

lder

s

(38

8,3

52

)

(38

8,3

52

)

(3

88

,35

2)

(3

88

,35

2)

1

5,4

31

5

,62

4

15

,43

1

5,6

24

Gro

up

Com

pa

ny

3

1-D

ec-

201

7

31

-Dec

-2

01

6

31

-Dec

-2

01

7

31

-Dec

-2

01

6

30

R

ein

sura

nce

ass

ets

Rei

nsu

ran

ce s

har

e o

f ou

tsta

nd

ing

cla

ims

(a)

1

,56

8,8

34

8

77

,52

0

1

,56

8,8

34

8

77

,52

0

P

rep

aid

rei

nsu

ran

ce (

see

no

te (

b)

)

3

44

,45

9

203

,87

5

3

44

,45

9

203

,87

5

R

ein

sura

nce

sh

are

of

IBN

R (

c )

108

,40

7

57

,65

2

1

08

,40

7

57

,652

Rei

nsu

ran

ce s

har

e o

f cl

aim

s p

aid

(d

)

2

58

,55

0

7,4

32

25

8,5

50

7

,43

2

P

rep

aid

M &

D R

ein

sura

nce

(e)

37

,958

4

7,2

44

3

7,9

58

4

7,2

44

2,3

18

,208

1

,19

3,7

23

2

,31

8,2

08

1

,19

3,7

23



Notes to the Consolidated and Separate Financial Statements Cont’d(a

)

The

mov

emen

t in

rei

nsur

ance

sha

re o

f ou

tsta

ndin

g cl

aim

s. i

s as

fol

low

s:

G

rou

p

C

om

pan

y

3

1-D

ec-

2017

31

-Dec

-20

16

31

-Dec

-201

7

31

-Dec

-2016

A

t 1 J

anu

ary

877,5

20

53

8,1

20

877,5

20

538,1

20

Chan

ges

duri

ng t

he

yea

r

691,3

14

33

9,4

00

691,3

14

339,4

00

At

31 D

ecem

ber

1,5

68,8

34

87

7,5

20

1,5

68,8

34

877,5

20

(b)

The

movem

ent

in p

repai

d r

einsu

rance

is

as f

oll

ow

s:

A

t 1 J

anu

ary

203,8

75

32

6,1

80

203,8

75

326,1

80

(Dec

reas

e)/I

ncr

ease

in p

repai

d r

einsu

rance

(se

e note

12)

140,5

84

(1

22,3

05)

140

,584

(1

22,3

05)

At

31 D

ecem

ber

344,4

59

20

3,8

75

344,4

59

203,8

75

(c)

The

movem

ent

in i

ncu

rred

but

not

rep

ort

ed (

IBN

R)

is a

s fo

llow

s:

A

t 1 J

anuar

y

5

7,6

52

17

8,1

27

57,6

52

178,1

27

(Dec

reas

e)/I

ncr

ease

in p

repai

d r

einsu

rance

(se

e note

12)

50,7

55

(1

20,4

75)

50

,755

(1

20,4

75)

At

31 D

ecem

ber

108,4

07

57,6

52

108,4

07

57,6

52

(d

) T

he

movem

ent

in r

einsu

rance

shar

e of

Pai

d c

laim

s is

as

foll

ow

s:

A

t 1 J

anuar

y

7

,432

8,8

56

7,4

32

8,8

56

Addit

ions

duri

ng t

he

yea

r

306,7

01

63

2,5

19

3

06,7

01

632,5

19

Rec

eived

fro

m r

einsu

rance

duri

ng t

he

yea

r

(55,5

83

) (6

33,9

43)

(55,5

83

) (6

33,9

43)

A

t 31

Dec

ember

258,5

50

7,4

32

258,5

50

7,4

32

(e

) T

he

movem

ent

in P

repai

d M

& D

rei

nsu

rance

is

as f

oll

ow

s:

A

t 1 J

anuar

y

4

7,2

44

48,8

98

47,2

44

48,8

98

Addit

ions

duri

ng t

he

yea

r

37,9

58

47,2

44

37,9

58

47,2

44

Am

ort

ised

duri

ng t

he

yea

r (s

ee n

ote

12)

(4

7,2

44)

(48,8

98)

(47,2

44)

(48,8

98)

A

t 31

Dec

ember

37,9

58

47,2

44

37,9

58

47,2

44



Notes to the Consolidated and Separate Financial Statements Cont’dD

efer

red

acq

uis

itio

n c

ost

Th

is r

epre

sen

ts c

om

mis

sio

n o

n u

nea

rned

pre

miu

m r

elat

ing

to

th

e u

nex

pir

ed t

enu

re o

f ri

sk.

G

rou

p

C

om

pa

ny

31

-Dec

-2

01

7

31

-Dec

-2

01

6

31

-Dec

-2

01

7

31

-Dec

20

16

Def

erre

d a

cqu

isit

ion

co

st

7

2,1

89

4

0,6

19

72

,18

9

40

,61

9

D

efer

red

acq

uis

itio

n c

ost

by

cla

ss o

f b

usi

nes

s

Def

erre

d a

cqu

isit

ion

co

st -

Fir

e

1

9,6

77

1

4,1

90

19

,67

7

14

,19

0D

efer

red

acq

uis

itio

n c

ost

- G

ener

al A

ccid

ent

1

4,0

52

8

,71

4

1

4,0

52

8

,71

4D

efer

red

acq

uis

itio

n c

ost

- M

oto

r

8

,23

4

6,7

86

8,2

34

6

,78

6D

efer

red

acq

uis

itio

n c

ost

- M

arin

e

8

,04

6

2,5

68

8,0

46

2

,56

8D

efer

red

acq

uis

itio

n c

ost

- B

on

d

1

,36

0

69

3

1

,36

0

69

3D

efer

red

acq

uis

itio

n c

ost

-E

ng

inee

rin

g

12

,13

54

,10

41

2,1

35

4,1

04

Def

erre

d a

cqu

isit

ion

co

st -

Sp

ecia

l ri

sks

8

,68

6

3,5

64

8,6

86

3

,56

4

7

2,1

89

4

0,6

19

7

2,1

89

4

0,6

19

Mov

emen

t in

def

erre

d a

cqu

isit

ion

co

st

A

t 1

Jan

uar

y

4

0,6

19

3

2,9

75

4

0,6

19

3

2,9

75

In

crea

se i

n d

efer

red

acq

uis

itio

n c

ost

(se

e n

ote

18

) 3

1,5

70

7

,64

4

3

1,5

70

7

,64

4

At

31

Dec

emb

er

7

2,1

89

4

0,6

19

7

2,1

89

4

0,6

19

O

ther

rec

eiv

ab

les

an

d p

rep

ay

men

ts

Pre

pay

men

ts

2

7,9

38

1

3,8

51

27

,93

8

13

,85

1O

ther

deb

tors

12

5,4

79

2

7,6

22

12

2,4

90

2

2,8

70

Div

iden

d r

ecei

vab

le

-

1,1

39

- 1

,13

9D

eposi

t fo

r p

urc

has

e of

pro

per

ty (

see

no

te (

a) b

elo

w)

6

86

,34

9

68

6,3

49

68

6,3

49

6

86

,34

9

8

39

,76

6

72

8,9

61

83

6,7

77

7

24

,20

9A

llow

ance

s fo

r im

pai

rmen

t (s

ee n

ote

21

) (1

9,2

68

) -

(1

9,2

68

)

8

20

,49

8

72

8,9

61

8

17

,50

9

72

4,2

09

31

-

(a)

(b)

32

-




(ai)

Incl

uded

in ‘

othe

r d

ebto

rs’ i

s D

epo

sit f

or s

hare

of

Tra

ns

Nat

ionw

ide

Exp

ress

off

er o

f N

90M

whi

ch is

yet

to b

e cr

edit

ed in

to

the

com

pany

’s C

SC

S a

ccou

nt a

s at

yea

r en

d.

(aii

)T

his

rep

rese

nts

dep

osit

fo

r p

urc

has

e of

land

in th

e E

ko

Atl

anti

c C

ity

Dev

elo

pm

ent S

chem

e, a

rea

l est

ate

dev

elop

men

t pro

ject

in

itia

ted

by th

e L

ago

s S

tate

Go

ver

nm

ent.

In 2

00

8, t

he C

omp

any

en

tere

d in

to a

n a

rran

gem

ent w

ith

Sou

th E

nerg

yx N

iger

ia L

imit

ed to

pur

chas

e la

nd

in th

e E

ko

Atl

anti

c C

ity

Dev

elo

pm

ent S

chem

e fo

r a

tota

l cos

t of

N6

86,

348,

800.

As

at 3

1 D

ecem

ber

20

17, t

he C

omp

any

had

mad

e a

tota

l dep

osit

o

f N

686.

3 m

illi

on

.

Gro

up

Com

pan

y

31-D

ec-

2017

31-D

ec-

2016

31-D

ec-

2017

31-D

ec-

2016

33

Inves

tmen

t in

fin

an

ce l

ease

Gro

ss i

nves

tmen

t in

fin

ance

lea

se r

ecei

vab

les

29,8

14

23,1

51

29,8

14

23,1

51

Acc

um

ula

ted a

llow

ance

for

unco

llec

tible

min

imum

lea

se

(9,6

60)

(9,6

60)

(9,6

60)

(9,6

60)

Net

inves

tmen

t in

fin

ance

lea

se r

ecei

vab

les

20,1

54

13,4

91

20,1

54

13,4

91

Net

inves

tmen

t in

fin

ance

lea

se r

ecei

vab

les:

Les

s th

an o

ne

yea

r

12,2

19

13,4

91

12,2

19

13,4

91

Bet

wee

n o

ne

and f

ive

yea

rs

7,9

35

-

7,9

35

-

Net

inves

tmen

t

20,1

54

13,4

91

20,1

54

13,4

91

34

Inv

estm

ent i

n s

ub

sid

iary

(a)

Thi

s re

pres

ents

the

Com

pan

y's

inve

stm

ent i

n U

nit

rust

Glo

bal

Ass

ets

Man

agem

ent L

imit

ed. T

he

com

pany

was

inco

rpor

ated

in

Jan

uar

y 20

01 a

nd i

ts p

rin

cip

al a

ctiv

ity

in

vo

lves

the

pro

visi

on o

f pr

oper

ty m

anag

emen

t se

rvic

es t

o bo

th i

ndiv

idua

l an

d

corp

ora

te c

lien

ts.

In t

he

op

inio

n o

f th

e di

rect

ors

, th

e va

lue

of t

he

inv

estm

ent

is i

n e

xce

ss o

f it

s co

st a

nd t

here

fore

, no

al

low

ance

for i

mp

airm

ent h

as b

een

reco

gn

ised

in th

e C

om

pany

's b

oo

ks.

(b)

The

det

ails

of t

he

con

soli

dat

ed s

ub

sid

iary

are

sh

ow

n b

elo

w:




Com

pan

y n

am

e C

ou

ntr

y o

f in

corp

ora

tion

Natu

re o

f B

usi

nes

s

201

7

2016

Unit

rust

Glo

bal

Ass

ets

Man

agem

ent

Lim

ited

Nig

eria

P

roper

ty M

anag

emen

t 10

0%

1

00%

Th

e yea

r-en

d c

on

soli

dat

ed i

s 31

Dec

ember

201

7.

(c)

Co

nd

ense

d r

esu

lts

of

con

soli

date

d e

nti

ties

(i

) T

he

cond

ense

d f

inan

cial

dat

a o

f th

e co

nso

lidat

ed e

nti

ties

as

at 3

1 D

ecem

ber

2017

are

as

foll

ow

s:

Nam

e of

enti

ty

Tota

l a

sset

s

Tota

l li

ab

ilit

ies

Net

ass

ets

Pro

fit

bef

ore

ta

x

S

aham

Un

itru

st I

nsu

ran

ce N

ig.L

td

12,7

54,5

06

4

,98

8,5

43

7

,76

5,9

63

81

4,5

43

Unit

rust

Glo

bal

Ass

ets

Man

agem

ent

Lim

ited

73

,88

2

23

,71

0

50,1

72

Eli

min

atio

n

(69

,912

) (6

8,9

12)

(1,0

00)

3,4

98

C

on

soli

dat

ed a

mo

unt

12,7

58,4

76

4

,94

3,3

41

7,8

15,1

35

81

8,0

41

(ii)

The

cond

ense

d f

inan

cial

dat

a o

f th

e co

nso

lidat

ed e

nti

ties

as

at 3

1 D

ecem

ber

2016

are

as

foll

ow

s:

Nam

e of

enti

ty

Tota

l a

sset

s To

tal

liab

ilit

ies

Net

ass

ets

Net

ass

ets

S

aham

Un

itru

st I

nsu

ran

ce N

ig.L

td

11

,545

,20

7

3,9

81

,27

3

7,0

10

,59

1

7,5

17,0

00

Unit

rust

Glo

bal

Ass

ets

Man

agem

ent

Lim

ited

6

9,2

94

21

,35

8

47

,93

6

47,9

36

Eli

min

atio

n

(6

5,0

66)

(64

,06

6)

(1,0

00)

(1,0

00)

C

on

soli

dat

ed a

mo

unt

11

,549

,43

5

3,9

38

,56

5

7

,05

7,5

27

7

,56

3,9

36




Th

is r

epre

sent

s th

e C

om

pan

y's

inve

stm

ent

in l

ande

d p

rope

rty

for

the

purp

ose

of

cap

ital

app

reci

atio

n. T

he

inv

estm

ent

pro

per

ty w

as

inde

pen

den

tly

val

ued

by

Pau

l O

saji

& C

o. E

stat

e su

rvey

or (

FR

C/2

013/

000

00

00

00

01

098)

as

at 3

1 D

ecem

ber

20

17

to

asce

rtai

n t

he

open

mar

ket

val

ue

of

the

inve

stm

ent p

rop

erty

. Th

e o

pen

mar

ket v

alue

of

the

pro

per

ty w

as ?

365

,000

,000

(2

01

6: ?

30

8,00

0,00

0). T

he

valu

er is

a q

ual

ifie

d m

emb

er o

f th

e N

iger

ian

Inst

itut

ion

of E

stat

e S

urv

eyo

rs a

nd

Val

uer

s.

36

In

tan

gib

le a

sset

s

Gro

up

Com

pan

y

3

1-D

ec-

201

7

31

-Dec

-2

016

31

-Dec

-201

7

31

-Dec

-201

6C

ost

:

A

t 1

Jan

uar

y

27,7

09

24,5

15

27,0

55

27,0

55

Addit

ions

4,0

17

3,1

94

4,0

17

3,1

93

B

alan

ce a

t 3

1 D

ecem

ber

31,7

26

27,7

09

31,0

72

27,0

55

A

ccu

mu

late

d a

mort

izati

on

:

B

alan

ce a

t 1

Jan

uar

y

24,3

35

23,1

86

23,6

81

22,6

94

Am

ort

izat

ion c

har

ge

for

the

yea

r

2,2

35

1,1

49

2,2

35

987

Bal

ance

at

31 D

ecem

ber

26,5

70

24,3

35

25,9

16

23,6

81

Net

boo

k v

alu

e

At

31 D

ecem

ber

2017

5,1

56

3,3

74

5,1

56

3,3

74

At

31 D

ecem

ber

2016

3,3

74

1,3

29

3,3

74

-

35

In

ves

tmen

t p

rop

erty

Gro

up

Com

pan

y

31

-Dec

-2017

31

-Dec

-2016

31-D

ec-

2017

31-D

ec-

2016

Bal

ance

at

1 J

anuar

y

308,0

00

308,0

00

308,0

00

308,0

00

F

air

val

ue

gai

ns

on i

nves

tmen

t pro

per

ty (

see

note

15b)

57,0

00

-

57,0

00

Bal

ance

at

31 D

ecem

ber

365,0

00

308,0

00

365,0

00

308,0

00

C

ost

of

inves

tmen

t pro

per

ty

250,4

76

250,4

76

250,4

76

250,4

76

C

um

ula

tive

fair

val

ue

gai

n

114,5

24

57,5

24

114,5

24

57,5

24

Fai

r val

ue

of

inves

tmen

t pro

per

ty a

t yea

r en

d

365,0

00

308,0

00

365,0

00

308,0

00

Pro

per

ty

B

alan

ce a

t

1 J

anuar

y

A

ddit

ion

D

isposa

l

Fai

r val

ue

Bal

ance

at

31

Dec

ember

Eko

Akae

te H

ousi

ng e

stat

e, I

bej

u-

Lek

ki

(Lan

ded

pro

per

ty)

308,0

00

57,0

00

365,0

00

To

tal

308,0

00

-

-

57,0

00

365,0

00

Gro

up

Com

pan

y

31

-Dec

-2017

31

-Dec

-2016

31

-Dec

-2017

31

-Dec

-2016




37

Pro

per

ty a

nd

eq

uip

men

t -

20

17

Pro

per

ty a

nd

eq

uip

men

t

(a)

Gro

up

La

nd

B

uil

din

g &

L

ease

hold

Im

pro

vem

ents

Mo

tor

Veh

icle

s

Co

mp

ute

r E

qu

ipm

ent

Off

ice

Eq

uip

men

t

Fu

rnit

ure

&

Fit

tin

gs

Tota

l

Co

st

At

1 J

anu

ary

80

0,0

00

80

0,0

00

14

1,0

49

36

,59

0

95

,72

8

62

,40

1

1,9

35

,768

Ad

dit

ion

s-

-

84

,34

9

4,1

66

7,3

30

22

,07

6

117,9

21

Dis

po

sals

-

-

(73)

-

(9,9

83

)

-

(10

,056)

Rev

aluat

ion i

ncr

ease

(se

e n

ote

47)

-

16

,00

0

-

-

-

-

16

,00

0

At

31

Dec

ember

80

0,0

00

81

6,0

00

22

5,3

25

40

,75

6

93

,07

5

84

,47

7

2,0

59

,633

Acc

um

ula

ted

dep

reci

ati

on

At

1 J

anu

ary

-

-

47

,39

3

35

,05

4

80

,90

2

58

,75

8

22

2,1

07

Ch

arg

e fo

r th

e y

ear

-

16

,00

0

34

,62

8

1,8

44

4,5

86

3,6

90

60

,74

8

Dis

po

sals

-

-

(73)

-

(9,9

83

)

-

(10

,056)

At

31

Dec

ember

-

16

,00

0

81

,94

8

36

,89

8

75

,50

5

62

,44

8

27

2,7

99

Net

boo

k v

alu

e

At

31

Dec

ember

2

01

7

80

0,0

00

80

0,0

00

14

3,3

77

3,8

58

17

,57

0

22

,02

9

1,7

86

,834

At

31

Dec

ember

2

01

6

8

00,0

00

8

00,0

00

9

3,6

56

1

,536

1

4,8

26

3

,643

1

,713

,660

T

he

Gro

up

's in

tang

ible

ass

et r

epre

sen

ts p

urch

ased

com

put

er s

oftw

are.

Th

e co

mpu

ter

soft

war

es a

re a

cco

unte

d f

or u

sing

the

cost

mo

del

in

lin

e w

ith

IAS

38

i.e

. cos

t le

ss a

ccum

ula

ted

amo

rtiz

atio

n an

d a

ccu

mul

ated

im

pair

men

t. T

he

amo

rtiz

atio

n is

cha

rged

to

th

e in

com

e st

atem

ent i

n li

ne

wit

h th

e G

rou

p's

pol

icy.

The

Com

pan

y's

lan

d a

nd b

uil

din

g w

ere

reval

ued

by P

aul

Osa

ji &

Co.

Est

ate

surv

eyor

(FR

C/2

013/0

0000000001098) o

n

31 D

ecem

ber

2017

.




37

Pro

per

ty a

nd

eq

uip

men

t -

201

6

Gro

up

La

nd

Bu

ild

ing &

L

ease

ho

ld

Imp

rovem

ents

M

oto

r V

ehic

les

C

om

pu

ter

Eq

uip

men

t

Off

ice

Eq

uip

men

t

Fu

rnit

ure

&

Fit

tin

gs

Tota

lC

ost

At

1 J

anuar

y

79

3,6

01

711

,911

88,6

92

35,1

40

82,3

96

60,3

49

1,7

72,0

89

Addit

ions

-

-

60,4

57

1,450

15,1

37

3,0

77

80

,121

Dis

posa

ls

-

-

(8,1

00

)

-

(1,8

05

)

(1,0

25

)(1

0,9

30)

Rev

aluat

ion i

ncr

ease

(se

e note

47)

6,3

99

88,0

89

-

-

-

-

94

,488

At

31 D

ecem

ber

80

0,0

00

80

0,0

00

141,0

49

36,5

90

95,7

28

62,4

01

1,9

35,7

68

A

ccu

mu

late

d d

epre

ciati

on

A

t 1 J

anuar

y

97,4

72

13

8,1

48

42,9

77

34,2

50

79,7

27

58,6

62

45

1,2

36

Ch

arg

e fo

r th

e yea

r

15,8

72

14,2

38

12

,516

804

2,9

80

1,1

21

47

,533

Dis

posa

ls

-

-

(8,1

00

)

-

(1,8

05

)

(1,0

25

)(1

0,9

30)

Eli

min

atio

n o

n R

eval

uat

ion (

see

note

47)

(113,3

44)

(152,3

86)

-

-

-

-(2

65

,731)

At

31 D

ecem

ber

-

-

47,3

93

35,0

54

80,9

02

58,7

58

22

2,1

08

Net

book

valu

e

At

31

Dec

ember

20

16

80

0,0

00

80

0,0

00

93,6

56

1,5

36

14,8

26

3,6

43

1,7

13,6

60

At

31 D

ecem

ber

2015

69

6,1

28

57

3,7

63

45,7

15

890

2,6

69

1,6

87

1,3

20,8

52

(a (

i))

Th

e de

pre

ciat

ion

esti

mat

e of

2%

on

lan

d a

s ad

op

ted

in p

rior

yea

r h

as b

een

con

sid

ered

no

lon

ger

ap

pli

cabl

e an

d a

cha

nge

of

this

es

tim

ate

was

app

rop

riat

ely

rev

iew

ed to

a 0

% r

ate.

Thi

s is

su

pp

ort

ed b

y ap

pre

ciat

ing

val

ue o

f la

nd

as

evid

ent b

y r

ecen

t val

uati

on

rep

ort b

y

Pau

l O

saji

& C

o. E

stat

e su

rvey

or (

FR

C/2

013/

0000

0000

00

10

98

) as

at

31 D

ecem

ber

201

6 to

asc

erta

in t

he o

pen

mar

ket

valu

e o

f la

nd a

s N

800,

000

and

bu

ildi

ng N

80

0,0

00

. Th

e va

luer

is a

qua

lifi

ed m

embe

r of t

he

Nig

eria

n In

stit

utio

n of

Est

ate

Su

rvey

ors

and

Val

uers

.




37

Pro

per

ty a

nd

eq

uip

men

t -

2017

P

rop

erty

an

d e

qu

ipm

ent

(

a)

Com

pan

y

L

and

Bu

ild

ing

&

Lea

seh

old

Im

pro

vem

ents

Mot

or

Veh

icle

s

C

omp

ute

r E

qu

ipm

ent

Off

ice

Eq

uip

men

t

F

urn

itu

re

& F

itti

ngs

T

otal

C

ost

A

t 1

Janu

ary

80

0,00

0

800,

000

139

,799

36

,590

95

,728

62,

401

1,

934,

518

A

ddit

ions

-

-

84

,349

4,

166

7,

330

22,

076

117,

921

D

ispo

sals

-

-

(7

3)

-

(9,9

83)

-

(1

0,05

6)

R

eval

uati

on s

urpl

us (

see

note

47)

-

16

,000

-

-

-

-

16,

000

A

t 31

Dec

embe

r

800,

000

81

6,00

0 2

24,0

75

40,7

56

93,0

75 8

4,47

7

2,05

8,38

3

A

ccu

mu

late

d d

epre

ciat

ion

A

t 1

Janu

ary

-

-

46

,143

35

,054

80

,902

58,

758

220,

857

C

harg

e fo

r th

e ye

ar

-

16,0

00

34,6

28

1,84

4

4,58

6

3,69

0 6

0,74

8

D

ispo

sals

-

-

(7

3)

-

(9,9

83)

-

(1

0,05

6)

A

t 31

Dec

embe

r

-

16,0

00

80,6

98

36,8

98

75,5

05 6

2,44

8 27

1,54

9

N

et b

ook

val

ue

A

t 31

Dec

embe

r 2

017

80

0,00

0

800,

000

143

,377

3,

858

17

,570

22,

029

1,

786,

834

A

t 31

Dec

embe

r 2

016

80

0,00

0

800,

000

93

,657

1,

536

14

,826

3,

643

1,

713,

660

T

he C

ompa

ny's

lan

d an

d bu

ildi

ng w

ere

reva

lued

by

Pau

l O

saji

& C

o. E

stat

e su

rvey

or (

FR

C/2

013/

0000

0000

0010

98)

on

31

Dec

embe

r 20

17.




Pro

per

ty a

nd

eq

uip

men

t -

201

6

(a)

C

om

pan

y

Lan

d

Bu

ild

ing &

L

ease

hold

Im

pro

vem

ents

Moto

r V

ehic

les

Com

pu

ter

Eq

uip

men

t

O

ffic

e E

qu

ipm

ent

Fu

rnit

ure

&

Fit

tin

gs

Tota

l C

ost

At

1 J

anuar

y

793,6

01

711

,911

87,4

42

35,1

40

82,3

96

60,3

49

1,7

70,8

39

Addit

ions

-

-

60,4

57

1,4

50

15,1

37

3,0

77

80,1

21

Dis

posa

ls

-

-

(8,1

00)

-

(1,8

05)

(1

,025)

(1

0,9

30)

Rev

aluat

ion s

urp

lus

(see

note

47)

6,3

99

88,0

89

-

-

-

-

94,4

88

At

32 D

ecem

ber

800,0

00

800,0

00

139,7

99

36,5

90

95,7

28

62,4

01

1,9

34,5

18

Acc

um

ula

ted

dep

reci

ati

on

A

t 1 J

anuar

y

97,4

72

138,1

48

41,7

27

34,2

50

79,7

27

58,6

62

449,9

86

Char

ge

for

the

yea

r

15,8

72

14,2

38

12,5

16

804

2,9

80

1,1

21

47,5

33

Dis

posa

ls

(8,1

00)

-

(1,8

05)

(1

,025)

(1

0,9

30)

Rev

aluat

ion s

urp

lus

(see

note

47)

(1

13,3

44)

(152,3

86)

-

-

-

-

(265,7

31)

At

31 D

ecem

ber

-

-

46,1

43

35,0

54

80,9

02

58,7

58

220,8

58

Net

book

valu

e

At

31 D

ecem

ber

2016

800,0

00

800,0

00

93,6

56

1,5

36

14,8

26

3,6

43

1,7

13,6

60

At

31 D

ecem

ber

2015

696,1

28

573,7

63

45,7

15

890

2,6

69

1,6

87

1,3

20,8

52

(a

(i)

) T

he

depr

ecia

tion

est

imat

e of

2%

on

lan

d a

s ad

opte

d in

pri

or

yea

r ha

s be

en c

on

side

red

no

lon

ger

app

lica

ble

and

a c

han

ge

of th

is e

stim

ate

was

ap

pro

pri

atel

y re

view

ed to

a 0

% r

ate.

Th

is is

su

pp

ort

ed b

y a

ppre

ciat

ing

val

ue o

f la

nd

as

evid

ent b

y r

ecen

t val

uat

ion

repo

rt b

y P

aul

Osa

ji &

Co

. E

stat

e su

rvey

or (

FR

C/2

013

/000

0000

000

10

98

) as

at

31 D

ecem

ber

201

6 to

asc

erta

in t

he o

pen

mar

ket

val

ue o

f la

nd a

s N

800

,00

0 a

nd

bu

ild

ing

N8

00

,00

0. T

he

val

uer i

s a

qual

ifie

d m

embe

r of t

he N

iger

ian

Inst

itu

tion

of E

stat

e S

urve

yors

and

Val

uers

.




38 Statutory deposit

Group Company31-Dec-

201731-Dec-

201631-Dec-

201731-Dec-

2016

General Business

315,000

315,000

315,000

315,000

39 Insurance contract liabilities

Outstanding claims (see note (a) below)

2,708,296

1,975,469

2,708,296

1,975,469Unearned premium (see (b) below)

664,456

479,511

664,456

479,511

Total insurance contract liabilities

3,372,753

2,454,980

3,372,753

2,454,980

(a) Outstanding claims

(i) Outstanding claims represent the estimated costs of settling all claims arising from incidents occurring as at the reporting date. The liability adequacy test for outstanding claims liabilities as at 31 December 2017 and the comparative period was done by Ernst & Young (FRC/NAS/00000000738).

(ii) Movement in provision for outstanding claims

Group Company

31-Dec-2017

31-Dec-2016

31-Dec-2017

31-Dec-2016

Motor

256,953 221,683

256,953

221,683

Fire

182,839 125,789

182,839

125,789

General accident

285,207 372,503

285,207

372,503

Marine

61,077 42,325

61,077

42,325

Bond

418

3,722

418

3,722

Engineering

166,613

219,437

166,613

219,437

Oil and gas

1,755,190

990,009

1,755,190

990,009

2,708,296

1,975,469

2,708,296

1,975,469

(i) Movement in provision for outstanding claims Company

Company

31-Dec-2017

31-Dec-2016

At 1 January

1,975,469

1,818,483 Addition during the year

1,728,905

1,234,591

Claims paid during the year

(996,078)

(1,077,605)

Changes in outstanding claims

(see note 17)

732,827

156,986

At 31 December

2,708,296

1,975,469

(iiib) Claims incurred but not reported

Company

Company

31-Dec-2017

31-Dec-2016

At 1 January

333,792

321,381

Addition during the year (57,575) 12,411At 31 December 276,217 333,792

Outstanding claims per claimant

0 - 90 days

91 - 180 days

181 - 365days 366 days+ Total

1 - 250,000 7,297 4,852 50,563 81,181 143,892 250,0001 - 500,000

6,691

5,595

88,137

51,839

152,263

500,001 - 1,500,000

17,293

14,793

64,756

70,579

167,422 1,500,001-2,500,000

3,276

11,418

55,726

27,621

98,040

2,500,001 - 5,000,000

24,756

21,277

124,020

161,565

331,618

5,000,001 - Above 20,984 11,251 970,367 812,458 1,815,060

Total 80,298 69,186 1,353,569 1,205,243 2,708,296




(b) Unearned premium

(i) Unearned premium represents premium relating to risk for period not within the accounting period and constitutes liabilities for short-term insurance contracts for which the Company's obligations have not expired as at year end.

(ii)The age analysis of provision for outstanding claims is shown below:

The company opened the year 2017 with 2,352 outstanding claims from prior year, this figured drop to 2,092 by year end thus achieving a reduction rate of 9%. Of the outstanding claims, 95% are above 90 days holding period with 99% of those being related to pending substantiating documentations while 1% relate to Discharge Vouchers having been issued but yet to be returned for settlement by our customers or their beneficiaries.

Group Company 31-Dec-

2017 31-Dec-

2016 31-Dec-

2017 31-Dec-

2016 Motor (133,591) (140,162) (133,591) (140,162) Fire (167,513) (135,170) (167,513) (135,170) General accident (125,476) (87,498) (125,476) (87,498) Marine (70,290) (28,442) (70,290) (28,442) Bond (9,007) (3,640) (9,007) (3,640) Engineering (79,104) (34,000) (79,104) (34,000) Oil and Gas (79,476) (50,601) (79,476) (50,601)

(664,456) (479,511) (664,456) (479,511)

(ii) Movement in unearned premium:

At 1 January 479,511 633,383 479,511 633,383 Increase/(Decrease )during the year

(see note 11) 184,945 (153,872) 184,945 (153,872)

At 31 December 664,456 479,511 664,456 479,511




40 Trade payables

Group Company 31-Dec-

2017 31-Dec-

2016 31-Dec-

2017 31-Dec-

2016 Due to reinsurers 141,559 4,622

141,559 4,622

Due to brokers 203,236 202,820

203,236 202,820 Due to insurance companies - - - - 344,795 207,442 344,795 344,795 All amounts are payable within one year.

Current 344,795 207,442 344,795 207,442

Non-Current - - -

344,795 207,442 344,795 207,442

41 Accruals and other payables

Accrued expenses (a) 126,400 102,588 105,047 102,588 Accrued retirement benefit 3,724 43,391 3,724 43,391 Accrued professional fees 31,661 28,294 31,661 28,294 Unearned commission income 84,789 32,944 84,789 32,944 Deferred income 23,327 45,277 23,327 45,277 Intercompany payables - - 68,911 56,259 Dividend payable ( b) 105,320 297,000 105,320 297,000 Accounts payable (c 59,002 44,288 59,002 31,971

434,233 593,782 481,781 637,723

Trade payables represent liabilities to re-insurers, brokers, insurance companies and agents on insurance contracts as at year end.

a. Accrued expenses consist of Assessment levy, stamp duties, and WHT payablesb. Dividend payable represent dividend due to Colina Holdings Ltd, the amount outstanding is due to the forex

policy restoration in Nigeriac. Account payable consists of PAYE, ITF payable and pension payable

*Commission payable has been reclassified to trade payable (N202.8m:2016)

42 Current income tax liabilities

(a) The movement in this account during the year was as follows:

Group

Company

31-Dec-2017

31-Dec-2016

31-Dec-2017

31-Dec-2016

At 1 January

358,910

371,662

357,565

369,215

Prior years' under-provision

-

-

-

Charge for the year (see note (b) below)

244,825

323,775

243,566

323,527

At 31 December

(323,857)

(336,527)

(323,609)

(335,177)

Balance, end of year

279,878

358,910

277,521

357,565

(b)

The tax charge for the year comprises:

Corporate income tax

220,372

290,019

219,192

289,796

Education levy

16,481

20,570

16,402

20,570

NITDA

7,972

13,161

7,972

13,161

244,825 323,775 243,566 323,527Deferred tax charge 145,535 204,842 145,535 204,866

Total tax charge for the year 390,360 528,617 389,101 528,394

Corporate income tax has been computed at the rate of 30% of total profits (2016: 30%) and education levy at the rate of 2% of assessable profits (2016: 2%) for the year after adjusting for certain items of income and expenditure which are not deductible or chargeable for tax purposes




(All

am

ou

nts

are

in

tho

usa

nds

of

na

ira)

(c)

Rec

on

cili

ati

on

of

effe

ctiv

e ta

x r

ate

G

rou

p

C

om

pa

ny

31

-Dec

-20

17

31

-Dec

-20

16

3

1-D

ec-2

01

7

31

-Dec

-20

16

P

rofi

t b

efo

re t

ax

81

8,0

41

1,5

46,9

37

81

4,5

43

1,5

45

,13

3

Inco

me

tax u

sin

g t

he

do

mes

tic

corp

ora

tion t

ax r

ate

27

%

22

0,3

72

26

%

39

4,5

89

27

%

21

9,1

92

30

%

46

3,5

40

No

n-d

educt

ible

exp

ense

s

4

1%

33

2,1

44

16

%

25

0,0

25

41

%

33

5,6

96

17

%

25

7,5

89

Tax

exem

pt

inco

me

-10

8%

(87

9,4

33

)

-76

%

(1,1

77

,16

1)

-10

8%

(87

9,4

33

)

(74

%)

(1,1

48

,56

5)

Tax

ince

nti

ves

(1

1%

)

(87,8

95)

(2%

)

(29

,80

2)

(11

%)

(88

,93

0)

(4%

)

(65

,73

9)

Ed

uca

tion

tax

lev

y

2%

16

,48

1

1%

20

,57

0

2%

16

,40

2

1%

20

,57

0

NIT

DA

1%

7,9

72

1%

13

,16

1

1%

7,9

72

1%

13

,16

1

(48

%)

(39

0,3

60

)

(34%

)

(52

8,6

17)

(48

%)

(38

9,1

01

)

(30

%)

(45

9,4

44

)

43

Def

erre

d t

ax l

iab

ilit

ies

Def

erre

d t

ax a

sset

s an

d l

iab

ilit

ies

are

offs

et w

hen

th

ere

is a

leg

ally

enf

orce

able

rig

ht

to o

ffse

t cu

rren

t ta

x a

sset

s ag

ains

t cu

rren

t ta

x li

abil

itie

s an

d w

hen

the

defe

rred

in

com

e ta

xes

ass

ets

and

liab

ilit

ies

rela

te t

o i

nco

me

taxe

s le

vie

d b

y t

he

sam

e ta

xati

on

au

tho

rity

on

ei

ther

the

taxa

ble

en

tity

or d

iffe

rent

tax

able

ent

itie

s w

here

ther

e is

an

inte

ntio

n to

set

tle

the

bala

nces

on

a n

et b

asis

.




(a)

Def

erre

d ta

x as

sets

and

lia

bili

ties

are

att

ribu

tabl

e to

the

fol

low

ing:

Gro

up

31-D

ec-2

017

31-D

ec-2

016

A

sset

s

L

iab

ilit

ies

Net

Ass

ets

Lia

bil

itie

s

N

et

P

rope

rty

and

equi

pmen

t

269,

815

2

69,8

15

36

6,15

8

36

6,15

8

In

vest

men

t pr

oper

ty

-

-

-

-

-

-

A

llow

ance

s fo

r im

pair

men

t on

tra

de

rece

ivab

les

-

-

-

-

-

-

Ava

ilab

le-f

or-s

ale

fina

ncia

l as

sets

-

-

-

-

-

-

Unr

eali

sed

exch

ange

gai

n

241,

878

24

1,87

8

-

-

-

511,

693

51

1,69

3

-

366,

158

36

6,15

8

C

omp

any

31-D

ec-2

017

31-D

ec-2

016

Ass

ets

Lia

bil

itie

s

N

et

A

sset

s

L

iab

ilit

ies

Net

P

rope

rty

and

equi

pmen

t

-

269,

815

26

9,81

5

-

366,

158

36

6,15

8

In

vest

men

t pr

oper

ty

-

-

-

-

-

-

A

llow

ance

s fo

r im

pair

men

t on

tra

de

rece

ivab

les

-

-

-

-

-

-

Ava

ilab

le-f

or-s

ale

fina

ncia

l as

sets

-

-

-

-

-

-

Unr

eali

sed

exch

ange

gai

n

241,

878

24

1,87

8

-

-

-

51

1,69

3

511,

693

-

36

6,15

8

366,

158



(b)

Movem

ents

in t

empora

ry d

iffe

rence

s duri

ng t

he

yea

r en

ded

31 D

ecem

ber

2017:

Gro

up

Com

pan

y

Bala

nce

at

1

Jan

uary

Rec

ogn

ized

in

pro

fit

or

loss

R

ecogn

ized

in

oth

er

com

pre

hen

sive

inco

me

Bala

nce

at

31

Dec

emb

er

Bala

nce

at

1 J

an

uary

Rec

ogn

ized

in

pro

fit

or

loss

R

ecogn

ized

in

oth

er

com

pre

hen

sive

inco

me

Bala

nce

at

31

Dec

emb

er

Pro

per

ty a

nd e

quip

men

t

366,1

58

(96,3

43)

-

269,8

15

366,1

58

(96,3

43)

-269,8

15

Inves

tmen

t pro

per

ty

-

-

-

-A

llow

ance

s fo

r im

pai

rmen

t on

trad

e re

ceiv

able

s

-

-

-

-

--

Avai

lable

-for-

sale

fin

anci

al

asse

ts (

see

note

48)

-

-

-

-

--

Unre

alis

ed e

xch

ange

gai

n

-

241,8

78

-

241,8

78

-

241,8

78

-241,8

78

366,1

58

145,5

35

-

511

,693

366,1

58

145,5

35

-511

,693

`

(b)

Movem

ents

in t

empora

ry d

iffe

rence

s duri

ng t

he

yea

r en

ded

31

Dec

ember

2016:

Gro

up

Com

pan

y

Bala

nce

at

1

Jan

uary

Rec

ogn

ized

in

pro

fit

or

loss

Rec

ogn

ized

in

oth

er

com

pre

hen

sive

inco

me

Bala

nce

at

31

Dec

emb

er

Bala

nce

at

1 J

an

uary

Rec

ogn

ized

in

pro

fit

or

loss

Rec

ogn

ized

in

oth

er

com

pre

hen

sive

inco

me

Bala

nce

at

31

Dec

emb

er

Pro

per

ty a

nd e

quip

men

t

174,5

86

165,1

45

26,4

27

366,1

58

174,5

86

165,1

45

26,4

27

366,1

58

Inves

tmen

t pro

per

ty

-

-

-

--

All

ow

ance

s fo

r im

pai

rmen

t on

trad

e re

ceiv

able

s

-

-

-

-

--

Avai

lable

-for-

sale

fin

anci

al

asse

ts (

see

note

48)

-

-

-

-

--

Unre

alis

ed e

xch

ange

gai

n(3

9,7

21)

39,7

21

--

(39,7

21)

39,7

21

--

134,8

65

204,8

66

26,4

27

366,1

58

134,8

65

204,8

66

26,4

27

366,1

58





44 Share capital:Share capital comprises: Group Group Company Company

31-Dec-2017

31-Dec-2016

31-Dec-2017

31-Dec-2016

Authorized:5,000,000,000 Ordinary shares of ? 1 each

5,000,000

5,000,000

5,000,000

5,000,000

Issued and fully paid:

3,300,000,000 Ordinary shares of ? 1 each

3,300,000

3,300,000

3,300,000

3,300,000

45 Contingency reserve

The Company

maintains a statutory contingency reserve in accordance with the provisions of the Insurance Act CAP I17 LFN 2004

to cover fluctuations in securities and variations in statistical estimates at the rate equal to the higher of 3% of total premium or 20% of the total profit after taxation until the reserve reaches the greater of minimum paid up capital or 50% of net premium.

The movement in this account during the year is as follows:

Group

Company

31-Dec-2017

31-Dec-2016

31-Dec-2017

31-Dec-2016

At 1 January

2,045,266

1,887,886

2,045,266

1,887,886Transfer from profit

85,088

157,380

85,088

157,380

At 31 December

2,130,355

2,045,266

2,130,355

2,045,266

46 Retained earnings

The movement in this account during the year is as follows:

At 1 January

1,090,616

1,292,058

1,043,683

1,239,158Dividend paid (396,000) (825,000) (396,000) (825,000)Transfer from profit

342,593

623,558

340,354

629,525

At 31 December

1,037,209

1,090,616

988,037

1,043,683

47 Asset revaluation reserve

Asset revaluation reserve comprises the cumulative

net change in the fair value of land and building.

Group

Group

Company

Company31-Dec-

2017

31-Dec-2016

31-Dec-2017

31-Dec-2016

At 1 January

1,351,088

1,017,296

1,351,088

1,017,296Revaluation increase (see note 37)

16,000

94,488

16,000

94,488Elimination on Revaluation (note 37)

-

265,731

-

265,731Related tax (see note 43 (b))

-

(26,427)

-

(26,427)

At 31 December

1,367,088

1,351,088

1,367,088

1,351,088

48 Fair value reserve

The fair value reserve comprises the cumulative

net change in the fair value of available-for-sale securities until assets are derecognised or impaired.

Group

Group

Company

Company31-Dec-

201731-Dec-

201631-Dec-

201731-Dec-

2016

At 1 January (223,036) (270,915) (223,036) (270,915)Fair value (loss)/gain for the year 203,520 47,879 203,520 47,879

At 31 December (19,517) (223,036) (19,517) (223,036)




Staff and Directors' information

Staff and directors' analysis:

(i)

Employees earning more than ? 100,000 per annum, other than the executive directors, whose duties were wholl y or mainly discharged in Nigeria, received emoluments (excluding pension contribution and other allowances) in the following ranges:

Group

Company

31-Dec-2017

31-Dec-2016

31-Dec-2017

31-Dec-2016

Number

Number

Number Number

? 101,000 -

? 500,000

0

3

0 3

? 500,001 -

? 750,000

0

11

0 11

? 750,001 -

? 1,000,000

5

14

5 14

? 1,000,001 -

? 2,000,000

35

30

35 30

? 2,000,001 -

? 3,000,000

14

7

14 7

Over ? 3,000,000

40

21

40 21

94 86 94 86

(i) The average number of full time persons employed by the Company during the year was as follows:

Group Company

31-Dec-

2017

31-Dec-2016

31-Dec-2017

31-Dec-2016

Number

Number

Number Number

Management staff

20

20

20 20Non-management staff

74

66

74 66

94

86

94 86

Director's remuneration

(i)

Remuneration paid to the directors of the Company (excluding pension contribut ion and certain benefits) was as follows:

Group

Group

Company Company

31-Dec-2017

31-Dec-2016

31-Dec-2017

31-Dec-2016

Directors' fees

1,125

1,665

1,125 1,665

Other emoluments

21,485

19,403

21,485 19,403

22,610

21,068

22,610 21,068

(ii)

The directors' remuneration shown above (excluding pension contributions and other allowances) includes:

Group

Group

Company Company

31-Dec-2017

31-Dec-2016

31-Dec-2017

31-Dec-2016

Chairman

1,875

1,875

1,875 1,875

Highest paid director

25,000

25,000

25,000 25,000

(iii)

The emoluments of all other directors fell within the following ranges:

Group

Group

Company Company31-Dec-

201731-Dec-

201631-Dec-

201731-Dec-

2016Number Number Number Number

? 1,000,000 - ? 1,599,999

? 1,600,000 - ? 2,700,000 6 6 6 6? 2,700,001 - ? 3,800,000 3 3 3 3? 3,800,001 - ? 4,999,999

9 9 9 9



50 Net cash flow from operating activities before changes in operating assets

Group Company31-Dec-

201731-Dec-

201631-Dec-

201731-Dec-

2016

Profit after taxation 427,681 1,018,321 425,442 1,016,739Taxation 390,360 528,617 389,101 528,394

Profit before tax

818,041

810,744

814,543

1,545,133Adjustment to reconcile profit before taxation to net cash flow from operations:

Depreciation of property and equipment

60,748

40,191

60,748

47,533Amortisation of intangible assets

2,235

(2,073)

2,235

987Profit on disposal of property and equipment

(3,015)

(3,015)

(3,015)

(1,554)

(Write-back)/Additional impairment on trade receivables

-

-

-

-

(Write-back)/Additional impairment on loans and receivables

18,968

(181)

18,968

(181)

Additional/ (Writeback) impairment on other receivables and prepayment

-

-

-

-

Write-back of bad loans

-

-

-

-Write-off of premium debts

-

-

-

-Bad debts written off

2,000

-

2,000

-Fair value gain on investment property

(57,000)

-

(57,000)

-Net realized losses /(gain) on financial assets

(54,045)

(630,497)

(54,045)

(630,497)Interest received

(967,531)

(623,594)

(967,531)

(623,594)Rent received

(24,222)

(31,693)

(22,042)

(31,693)Dividend income on equity investments

(17,915)

(24,131)

(17,915)

(24,131)Other non-cash items

-

-

(221,737)

(464,248)

-

(223,055)

282,004

51 Changes in operating assets and liabilities

(Increase)/decrease in operating assets: - Loans and receivables

(34,248)

88,417

(34,248)

1,586

- Trade receivables

(9,808)

49,860

(9,808)

(1,406)- Reinsurance assets

(1,124,484)

78,617

(1,124,484)

(93,542)- Finance lease receivables

(6,663)

82,379

(6,663)

42,610- Other receivables

91,536

(11,221)

93,300

(26,902)- Deferred acquisition cost

(31,571)

16,176

(31,570)

(7,644)

Increase/(decrease) in operating liabilities:

- Insurance contract liabilities

917,772

(111,658)

917,772

3,114

- Trade payables 136,938 (256,774) 136,938 (194,264)- Other payables (159,143) (354,492) (155,526) 209,735

(219,671) (418,696) (214,289) (66,713)

52 Proposed dividend A dividend of 6 kobo per share, amounting to a total dividend of N198 million for the financial year ended 31 December 2017 is proposed by the Directors to be approved at the Annual General Meeting (2016: ? 396 Million at 12 kobo per share).

53 Contingents

(a) Claims and litigationsThe Company, like all other insurers, is subject to litigation in the normal course of its business. There were no litigation claims against the Company as at 31 December 2017 (2016: Nil).

(b) Financial guaranteesThe Company provides financial guarantee to third parties at the request of customers in the form of advance payment guarantee. As at the reporting date there was no guarantee, (2016: ? 87.17 million) represented the maximum loss that could result if the counter parties failed completely to perform the contract. No provisions in respect of these guarantees have been recognised in these financial statements.




54 Contravention of laws and regulationsThe Company has not incurred any penalty for contravening Section 25 of the NAICOM Act on late submission of returns. (2016: Nil).

55 Related parties

(a) SubsidiaryThe Company had one wholly owned subsidiary as at 31 December 2017. The operating and financing activities of the Company is carried out by the parent with a common direction and common managements. Transactions between Saham Unitrust Insurance Nigeria Limited and the subsidiary also meet the definition of related party transactions. Where these are eliminated on consolidation, they are not disclosed in the consolidated financial statements.

(b) Transactions with key management personnelThe Group's key management personnel, and persons connected with them, are also considered to be related parties for disclosure purposes. The definition of key management includes close members of family of key management personnel and any entity over which key management personnel exercise control. The key management personnel have been identified as the executive directors, non-executive directors and senior management of the Group. Close members of family are those family members who may be expected to influence, or be influenced by that individual in their dealings with Saham Unitrust Insurance Nigeria Limited.

(i) Key management compensationThe compensation of key management personnel for the year was as follows:

Group Company 31-

Dec-2017

31-Dec-2016

31-Dec-2017

31-Dec-2016

Short-term employee benefits 91,328 87,688 91,328 87,688 Post-employment benefits 7,060 9,893 7,060 9,893 Other long-term benefits - - -

98,388 97,582 98,388 97,582 (ii) Loans and advances to key management personnel 31-Dec-

2017

31-Dec-2016

Loans outstanding as at 1 January 750 400 Loans issued during the year 5,800 1,200

Loans repayment during the year

(2,832) (850)

Loans outstanding as at 31 December

3,718

750

No impairment has been recognised in respect of loans given to key management personnel (2016: Nil).

Loans to key management personnel are personal loans which are given under terms that are no more favourable than those given to other staff. The loan given to key management personnel of N5,8million during the year is repayable monthly over a period of one (1) year (2016: N1.2M).




N

ame

of r

elat

ed p

arty

R

elat

ion

ship

Rel

atio

nsh

ip

O

uts

tan

din

g b

alan

ce

Ou

tsta

nd

ing

bal

ance

31

-Dec

-201

7

31

-Dec

-201

6

U

nitr

ust

Glo

bal A

sset

s M

anag

emen

t L

imit

ed

Sub

sidi

ary

Sub

sidi

ary

68,9

11

57,9

78

Nam

e of

rel

ated

par

tyR

elat

ion

ship

Rel

atio

nsh

ip

Ou

tsta

nd

ing

bal

ance

Ou

tsta

nd

ing

bal

ance

31-D

ec-2

017

31-D

ec-2

016

Pir

otec

h N

iger

ia L

imit

ed

23,5

44

23,5

44

I.T

.B. N

iger

ia L

imit

ed

45,6

32

45,9

31

Tot

al c

omm

erci

al l

oan

s to

rel

ated

par

ties

Dir

ecto

r-re

late

dD

irec

tor-

rela

ted

69,1

76

69,4

75

Du

rin

g t

he

yea

r, t

he C

omp

any

en

gag

ed i

n t

rans

acti

ons

wit

h co

mp

anie

s w

ho

se d

irec

tors

are

als

o d

irec

tors

of

Sah

am U

nitr

ust

ln

sura

nce

Nig

eria

Lim

ited

at r

ates

an

d te

rms

com

para

ble

to s

imil

ar tr

ansa

ctio

ns

carr

ied

ou

t dur

ing

the

yea

r. D

etai

ls o

f th

ese

rela

ted

par

ty tr

ansa

ctio

ns

and

bal

ance

s at

yea

r en

d a

re a

s fo

llow

s:




31-

Dec-2017

31-Dec-2016

Name of related party Relationship

Nature of related party relationship

Outstanding balance

EMC Engineering

Director-related

Insurance underwriting

175

175

Best Land & Sea Services

Director-related


237

237

C & C Agro Allied Nig. Limited

Director-related


206

206

Campbell Holdings Limited

Director-related


1,567

1,567

Courdeau Catering Nig. Limited

Director-related


2,949

2,949

DamiI Nigeria Limited

Director-related


127

127

Dangil Holdings Co. Limited

Director-related


22

22

Glass Force Limited

Director-related


8,978

10,040

I.T.B. Nigeria Limited

Director-related


9,976

10,276

Jobsons Nigeria Limited

Director-related


1,561

1,561

Khalil & Dibbo Transport Limited

Director-related


24,269

24,269

M.J.M. Company Limited

Director-related


185

185

Motophone/lnternational Network Comm.

Director-related


2,432

2,432

Nidart Investment Limited

Director-related


1,125

1,125

Nigerian Eagle Flour Mills

Director-related


583

583

Norlin Nig. Limited

Director-related


198

198

Ocean Parade Limited

Director-related


174

174

Oiltech Nig. Limited

Director-related


3,023

3,023

Pioneer Foods Ind.Limited

Director-related


328

328

South Atlantic Petroleum Limited

Director-related


1,990

1,990

Taraba Fisheries (General)

Director-related


2,692

2,692

Taraba Fisheries (Marine)

Director-related


418

418

Tarabaroz Fisheries Limited

Director-related


4,549

4,549

Trolleys Limited

Director-related


949

949

T. Y. Chemicals Limited

Director-related


2,435

2,435

Tarnerash Pharmacy

Director-related


110

110

Total Insurance underwriting to related parties

71,258

72,620

The related party transactions were made on terms equivalent to those that prevail in arm’s length transactions.

No commercial loan or outstanding premium was written off during the year (2016: Nil). The outstanding premium balances and outstanding commercial loans from related parties have been fully impaired.

Events occurring after the reporting periodThere were no events that occurred subsequent to the reporting date that require adjustments or disclosure in the financial statements.




Other Financial Information

For

the

year

end

ed 3

1 D

ecem

ber

2017

(A

ll am

ount

s ar

e in

thou

sand

s of

nai

ra)

31-D

ec-2

017

31-D

ec-2

016

Not

es

Mot

or

Fir

e

Gen

eral

A

ccid

ent

Mar

ine

Bon

d E

ngin

eeri

ng

Oil

& G

as

Tot

al

Tot

al

IN

CO

ME

G

ross

pre

miu

m in

com

e

52

0,42

6

713,

014

445,

033

159,

577

22,0

00

166,

573

460,

112

2,

486,

736

1,92

9,28

7

Add

: Rei

nsur

ance

inw

ard

pre

miu

ms

-

-

- -

-

-

-

-

T

otal

gro

ss p

rem

ium

inco

me

520,

426

71

3,01

4 44

5,03

3 15

9,57

7

22

,000

16

6,57

3 46

0,11

2

2,48

6,73

6

1,

929,

287

C

hang

es in

Une

arne

d pr

emiu

m in

com

e

6,57

1

(3

2,34

3) (3

7,98

0)

(4

1,84

8)

(5

,366

)

(4

5,10

4)

(28,

874)

(1

84,9

45)

153,

872

G

ross

insu

ranc

e pr

emiu

m in

com

e

526,

997

680,

671

407,

053

117,

729

16,6

34

121,

469

431,

238

2,30

1,79

1

2,08

3,15

9

L

ess:

Rei

nsur

ance

cos

t

Rei

nsur

ance

exp

ense

s

(53,

776)

(607

,064

)

(208

,439

)

(85,

865)

(1

0,32

3)

(94,

321)

(383

,741

)

(1,4

43,5

28)

(933

,654

)

Prep

aid

rein

sura

nce

241

30,3

04

29,0

84

8,39

7

2,46

0

33,1

36

36,9

62

140,

584

(122

,305

)

(53,

535)

(576

,760

)

(179

,355

)

(77,

468)

(7

,863

)

(61,

185)

(346

,778

)

(1,3

02,9

44)

(1,0

55,9

59)

N

et in

sura

nce

prem

ium

inco

me

473,

462

103,

911

227,

698

40,2

61

8,77

1

60,2

85

84,4

60

998,

847

1,02

7,20

0

A

dd:

Fee

inco

me

Com

mis

sion

s re

ceiv

ed

508

136,

931

63,5

97

28,0

34

4,42

4

27,8

17

38,4

49

299,

761

178,

829

Def

erre

d co

mm

issi

on in

com

e

(274

)

(17,

171)

(6,7

21)

(7,7

29)

(1

,038

)

(10,

616)

(8,2

97)

(51,

845)

37,7

71

234

119,

760

56,8

76

20,3

05

3,38

6

17,2

02

30,1

52

247,

916

216,

601

Net

und

erw

riti

ng in

com

e

473,

696

223,

671

284,

575

60,5

66

12,1

57

77,4

87

114,

612

1,24

6,76

3

1,24

3,80

1




Rev

enu

e ac

cou

nt

For

the

year

en

ded

31 D

ecem

ber

2017

(All

am

ount

s ar

e in

thou

sand

s of

nai

ra)

31

-Dec

-201

7

31-D

ec-2

016

Not

es

Mot

or

Fir

e G

ener

al

Acc

iden

t

Mar

ine

Bon

d

En

gin

eeri

ng

Oil

& G

as

Tot

al

Tot

al

EX

PE

NS

ES

Cla

ims

paid

271,

412

31

2,64

3 16

2,36

1

24,1

76

-

95

,664

129,

822

99

6,07

8

1,

077,

605

Out

stan

ding

cla

ims

35,2

70 57

,049

(87,

296)

18

,751

(3

,303

)

(52,

824)

765,

181

73

2,82

7

15

6,98

7

Gro

ss c

laim

s ex

pen

ses

306,

682

36

9,69

2 75

,065

42

,927

(3

,303

)

42,8

39 895,

003

1,

728,

906

1,23

4,59

1

Les

s: R

eins

uran

ce c

laim

s re

cove

ries

/rec

over

able

(35,

806)

(2

64,8

95)

(52,

146)

(2

7,43

3)

-

(4

3,26

5)

(1,0

13,4

11)

(1

,436

,956

)

(879

,376

)

N

et c

laim

s ex

pen

ses

270,

876

10

4,79

7 22

,919

15

,495

(3

,303

)

(425

)

(118

,408

)

291,

949

355,

215

A

dd

: U

nd

erw

riti

ng

exp

ense

s

Acq

uisi

tion

exp

ense

s

13

0,92

2

213,

800

130,

014

46

,547

6,58

5

54,7

42 99

,986

68

2,59

5

46

6,23

5

Mai

nten

ance

exp

ense

s

-

-

-

-

-

-

-

-

-

D

efer

red

acqu

isit

ion

cost

s

(1

,448

)

(5,4

87)

(5,3

38)

(5

,477

)

(6

68)

(8

,030

) (5

,121

)

(31,

570)

(7,6

44)

T

otal

un

der

wri

tin

g ex

pen

ses

129,

474

20

8,31

2 12

4,67

6

41,0

69

5,

917

46

,711

94,8

65

651,

024

458,

591

Net

un

der

wri

tin

g ex

pen

ses

400,

349

31

3,10

9 14

7,59

5

56

,564

2,61

4

46

,286

(2

3,54

3)

94

2,97

4

813,

806

U

nd

erw

riti

ng

pro

fit

/ (lo

ss)

73,3

47

(89,

438)

136,

980

4,00

2

9,54

3

31,2

01

138,

155

303,

790

429,

995




Valu

e A

dd

ed S

tate

men

t

G

rou

p

G

rou

p

C

om

pan

y

C

om

pa

ny

3

1-D

ec-1

7 3

1-D

ec-1

6

31

-Dec

-17

31

-Dec

-16

?

’000

%

?

’000

%

?

’00

0

%

?’0

00

%

Gro

ss p

rem

ium

in

com

e

2,3

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59

Com

mis

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n a

nd

oth

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me

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47,9

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216

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24

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To

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der

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ting e

xpen

ses

(2

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)

(1

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)

(2

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(1,8

69

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)

Un

der

wri

tin

g p

rofi

t

303,7

90

429

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303

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429,9

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Inves

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1,1

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1,3

34

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1,3

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ow

ance

fo

r Im

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rmen

t

(33,3

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1

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(33,3

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181

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per

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s

(337

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)

(1

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83)

(338,9

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(14,5

83)

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alu

e ad

ded

1,0

77

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100

1,7

50

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162

1,0

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100

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54

100

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ed t

o p

ay:

Em

plo

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ries

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d o

ther

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s

196

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9

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23

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he

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sines

s:

-

D

efer

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ion

145

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204

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145

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14

204,8

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12

-

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reci

atio

n o

f pro

per

ty a

nd e

quip

men

t

60,7

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6

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3

60,7

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6

47,5

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3

-

Am

ort

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of

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ng

ible

ass

ets

2,2

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0.2

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To

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men

t r

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ves

427

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40

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58

425

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40

786,9

05

58

V

alu

e ad

ded

1,0

77

,347

100

1,7

50

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100

1,0

73,8

49

100

1,7

48,2

54

100




Other Financial Information: Financial Summary

(All amounts are in thousands of naira)

Group

STATEMENT OF FINANCIAL POSITION

31-Dec-2017

31-Dec-2016

31-Dec-2015

31-Dec-2014

31-Dec-2013

Assets


599,966

933,557

1,360,933

1,976,040

1,615,429

Available-for-sale securities

400,667

293,198

245,319

307,401


6,023,847

5,915,783

5,372,686

5,657,155


15,526

2,246

3,839

8,266

18,314Pledged Assets

-

77,971

87.165

137,057


15,431

5,624

4,218

53,658


2,318,208

1,193,723

1,100,181

1,129,900


72,189

40,619

32,975

49,151

115,036Other receivables and prepayment

820,498

728,961

755,018

636,356


20,154

13,491

56,101

138,480

62,432Investment in subsidiary

-

-

-

-

-Investment property

365,000

308,000

308,000

305,000


5,156

3,374

1,329

2,156

654Property, plant and equipment

1,786,834

1,713,660

1,320,852

1,349,542


315,000

315,000

315,000

315,000

315,000

Total assets

12,758,476

11,545,207

10,963,616

12,065,162

12,399,937

Liabilities


3,372,753

2,454,980

2451,866

2,563,525

3,311,015Trade

payables

344,795

207,442

198,885

455,659

577,912Provision and other payables

434,223

593,782

630,808

934,475

772,445Current income tax liabilities

279,878

358,910

369,215

543,326

507,465Deferred tax liability

511,693

366,159

134,864

405,962

360,550

Total liabilities

4,943,341

3,981,273

3,737,291

4,902,947

5,529,387

Equity

Issued and paid share capital

3,300,000

3,300,000

3,300,000

3,300,000

3,300,000Contingency reserve

2,130,355

2,045,266

1,887,886

1,640,494

1,361,912Retained earnings

1,037,209

1,090,616

1,292,058

1,393,608

1,351,824Asset revaluation reserve

1,367,088

1,351,088

1,017,296

1,017,296

930,023Fair value reserve

(19,517)

(223,036)

(270,915)

(189,183)

(73,209)

Shareholders' funds

7,815,135

7,563,934

7,226,325

7,162,215

6,870,550

Total Liabilities and Equity 12,758,476 11,545,207 10,963,616 12,065,162 12,399,937

Company




STATEMENT OF FINANCIAL POSITION

31-Dec-2017 31-Dec-2016 31-Dec-2015 31-Dec-2014 31-Dec-2013

Assets

Cash and cash equivalents 597,985 932,970 1,359,637 1,970,779 1,602,854Available-for-sale securities 400,667 293,198 245,319 307,401 423,376Held-to-maturity securities 6,023,847 5,915,783 5,372,686 5,657,155 6,103,945Loans and receivables 15,526 2,246 3,651 7,918 17,642Pledged Assets - 77,971 87.165 137,057 223,465

Trade receivables 15,431 5,624 4,218 53,658 18,073Reinsurance assets 2,318,208 1,193,723 1,100,181 1,129,900 1,503,302Deferred Acquisition Cost 72,189 40,619 32,975 49,151 115,036Other receivables and prepayment 817,509 724,209 751,111 621,504 436,460Investments in finance lease 20,154 13,491 56,101 138,480 62,432Investment in subsidiary 1,000 1,000 1,000 1,000 1,000Investment property 365,000 308,000 308,000 305,000 305,000Intangible assets 5,156 3,374 1,167 1,830 -Property, plant and equipment 1,786,834 1,713,660 1,320,852 1,349,541 1,262,355Statutory deposits 315,000 315,000 315,000 315,000 315,000 Total assets 12,754,506 11,540,867 10,959,063 12,045,374 12,389,940

Liabilities

Insurance contract liabilities 3,372,753 2,454,980 2451,866 2,563,525 3,311,015Trade payables 344,795 207,442 198,885 455,659 577,912Provision and other payables 481,781 637,723 630,808 976,553 807,941Current income tax liabilities 277,521 357,565 369,215 536,535 500,620Deferred tax liability 511,693 366,158 134,864 405,909 360,472 Total liabilities 4,988,543 4,023,868 3,785,638 4,938,181 5,557,960

Equity

Issued and paid share capital 3,300,000 3,300,000 3,300,000 3,300,000 3,300,000Contingency reserve 2,130,355 2,045,266 1,887,886 1,640,494 1,361,912Retained earnings 988,037 1,043,683 1,239,158 1,338,586 1,313,254Asset revaluation reserve

1,367,088 1,351,088 1,017,296 1,017,296 930,023

Fair value reserve (19,517) (223,036) (270,915) (189,183) (73,209)

Shareholders' funds 7,765,963 7,517,001 7,173,425 7,107,193 6,831,980

Total Liabilities and Equity 12,754,506 11,540,867 10,959,063 12,045,374 12,389,940




Group

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

31-Dec-

2017

31-Dec-

2016

31-Dec-

2015

31-Dec-

2014

31-Dec-

2013


2,486,736

1,929,287

2,566,315

2,845,108

3,023,935

Premium earned

2,301,791

2,083,159

(1,182,135)

3,132,288

3,080,094


818,041

1,309,556

1,311,950

1,916,206

1,894,502

Taxation

(390,360)

(528,617)

(77,110)

(506,845)

(515,461)


427,681

780,939

1,234,840

1,409,361

1,379,041


219,520

381,671

(81,732)

(28,701)

211,164

Total comprehensive income

647,201

1,162,611

1,153,108

1,380,660

1,590,205

Transfer to contingency reserves 85,088 157,380 247,392 278,582 276,192

Earnings per share - Basic 13 24 37 42 42

Company STATEMEN T OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

31-Dec-

2017

31-Dec-

2016

31-Dec-

2015

31-Dec-

2014

31-Dec-

2013


2,486,736

1,929,287

2,566,315

2,845,108

3,023,935

Premium earned

2,301,791

2,083,159

(1,182,135)

3,132,288

3,080,094


818,041

1,315,299

1,312,715

1,897,686

1,892,738

Taxation

(390,360)

(528,394)

(75,756)

(504,777)

(511,780)


427,681

786,905

1,236,959

1,392,909

1,380,958


219,520

381,671

(81,732)

(28,701)

211,164

Total comprehensive income

647,201

1,168,577

1,155,227

1,364,208

1,592,122

Transfer to contingency reserves

85,088

157,380

247,392

278,582

276,192

Earnings per share - Basic 13 24 24 37 42

NOTES



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