rc: 7340 aiico...76 2009 annual report & accounts lagos, nigeria for the year ended, december...

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Insurance

Travel

InsuranceMortgage

ProtectionPolicy

Goods-In-Transit

Insurance

General

Insurance

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GroupEducationPolicy

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Motor

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CashAccumulation

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GroupCreditLife

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EducationLegacy

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INSURANCEAIICOAMERICAN INTERNATIONAL

...Firm for the future

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AIICO Plaza, Plot PC12, Afribank Street, Victoria Island, P.O.Box 2577, Lagos, Nigeria. +234-1-2792950-59, 4753360, 4753362, 4753363, 08022921804, 08022921805.

+234-01-2617433. [email protected] www.aiicoplc.com

Tel:Fax:

E-mail: Website:



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You can put all your eggs inour basket

AIICO Plaza,Plot PC 12, Afribank Street, Victoria Island, Lagos

01-2792930-59, 4753360-3 [email protected]

Tel:E-mail: Website: www.aiicoplc.com



RC: 7340

2009 Annual Report & Accounts

We build our world around you

AIICO Plaza, Plot PC12, Afribank Street, Victoria Island,P.O.Box 2577, Lagos, Nigeria.

+234-1-2792950-59, 4753360, 4753362, 4753363, 08022921804, 08022921805.+234-01-2617433.

[email protected] www.aiicoplc.com

Tel:Fax:

E-mail: Website:

Globally in recent times, companies are adding quality & distinct valueto life. No wonder, at AIICO we make it our business to care, support and serve you a whole insurance package coupled

with financial services.



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76 2009 Annual Report & Accounts

Lagos, Nigeria

For The Year Ended, December 31, 2009

REPORT OF THE DIRECTORSAND

AUDITED FINANCIAL STATEMENTS


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CONTENTS

2009 Annual Report & Accounts 75

PAGE

Notice of Annual General Meeting

Directory

Board of Directors

Directors and Professional Advisers

Result at a Glance

Chairman’s Statement

Report of the Directors

Review of Operation

Report of Audit Committee

Report of the Auditors

Statement of Significant Accounting Policies

Group Balance Sheet

Company Balance Sheet-Life

Company Balance Sheet-General

Group Profit and Loss Account

Company Profit & Loss Account-Life

Company Profit & Loss Account-General

Revenue Account-Life

Revenue Account-General

Deposit Administration Revenue Account

Statement of Cashflows

Notes to the Financial Statements

Statement of Value Added

Group Five-Year Financial Summary

Company Five-Year Financial Summary-Life

Graphic Illustrations

Unclaimed Dividends and Share Certificates

Management Directorate

Proxy Form

3-4

6

7

8

9

11-15

17-20

22-23

24

26

27-29

31

32

33

34-35

36

37

38

39

40

41

42-61

63

65

66

67

68

70

71

NOTE


NOTICE OF ANNUAL GENERAL MEETING


Notice is hereby given that the 40th Annual General Meeting of Aiico Insurance Plc. will be held

at the Monty Suites, Behind Zone 6 Police Headquarters, off Murtala Mohammed Highway, Esuk

Utan, Calabar, Cross Rivers State on Wednesday 6th October, 2010 at 11:00am to transact the

following businesses:

Ordinary Business:

1. To receive the Report of the Directors and the Balance Sheet as at 31st December, 2009

together with the Profit and Loss Account for the period ended on that date and the

Reports thereon of the Auditors and the Statutory Audit Committee.

2. To declare Dividend

3. To re-elect Directors

4. To approve Directors Remuneration

5. To authorise the directors to appoint auditors and fix their remuneration

6. To elect shareholders as members of the Statutory Audit Committee

Special Business:

To consider and if thought fit, to pass the following resolution which is being proposed as a

Special Resolution:

“That the Company re-absorbs Aiico General Insurance Company Limited into its operations,

and go through all the processes involved in consolidating its operating license as a composite

Insurance Company, subject to the approval of relevant regulatory authorities”

NOTES:

1. PROXY

i. A member of the Company entitled to attend and vote at the Meeting is entitled to

appoint a proxy to attend and vote in his or her place. A proxy need not be a member of

the Company. A form of proxy is attached at the last page of this report.

ii. If the proxy form is to be valid for the purpose of this meeting, it must be completed,

detached and deposited at the Office of the Registrar, United Securities Limited, 14,

Idowu Taylor Street, Victoria Island, P.M.B. 12753, Lagos, not later than 48 hours

before the time for holding the meeting.

2. DIVIDEND WARRANT

If the dividend recommended is approved, the warrant will be posted on the 25th October, 2010

to shareholders whose names appear on the Company’s Share Register at the close of business

on the 16th September, 2010.

NOTE

What you we value, protect

AIICO Plaza, Plot PC12, Afribank Street, Victoria Island. 01-2624002, 7919804, 4753359, 4753360-3, 08056158816

[email protected] www.aiicoplc.comTel:

E-mail: Website:

AIICO Insurance Plc

Welcome to a world of protection. Our proudheritage of financial strength and professional standards

now combine to protect your most valuable assets.Welcome to AIICO General



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3. CLOSURE OF REGISTER OF MEMBERS

The register of members and transfer books will be closed from the 13th till the 15th September, 2010

both dates inclusive for the purpose of preparing an up-to-date Register.

4. APPOINTMENT OF MEMBERS OF THE STATUTORY AUDIT COMMITTEE

Pursuant to and in accordance with Section 359(5) of the Companies and Allied Matters Act 1990, any

member may nominate a shareholder as a member of the Audit Committee by giving notice in writing

of such nomination to the Secretary of the Company at least 21 days before the Annual General

Meeting.

BY ORDER OF THE BOARD

10th September, 2010

S. A. ODUROYE

Company Secretary/Legal Adviser

Aiico Insurance Plc.

Aiico Plaza,

Plot PC 12, Afribank Street,

Victoria Island,

Lagos.

S. A. ODUROYE Group Company Secretary/Legal Adviser

STRENGTH STABILITY SECURITY TRUST

To our clients, our word is our bond.

Strength...from the totality of our brand essence plus preference for ourcustomers, suggestions & questions...



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REGISTRARS

14, Idowu Taylor Street,Victoria Island,

Lagos


DIRECTORY

CORPORATE HEAD OFFICE

Plot PC 12, Afribank Street, Victoria Island, Lagos. Tel: (234) 01-2792930-59, 08022921804-5.

Fax: (234) 01-2799800 E-mail: [email protected] Website: //www.aiicoplc.com

AIICO PLAZA

37,NigerRoad Opp. Union Bank Building Kano Tel: 08028338804

Ikeja AIICO House, Plot 2, Oba Akran Avenue, Opposite Dunlop, Ikeja, Lagos Tel: 01-4312400,08023178534 Fax: 01-4976590 Isolo 203/205, Oshodi - Apapa E/way,Isolo, Lagos Tel: 01-7743730 I1upeju AIICO House 36/38, Ilupeju industrial Avenue Ilupeju,lagos Tel: 8194714,4752157 8 Lagos Island 143/145, Broad Street Lagos Tel: 08023054803

Nipost Building Old market RoadOnitsha Tel: 046-212830,08033750361

65/67, Douglass RoadOwerri Tel: 08055314351

10, Obafemi Awolowo RoadIgbona, Oshogbo Tel: 08035119411

Corporate Affairs Building 112E, Aba Road Port Harcourt Rivers State Tel: 084 - 231251-2 Fax: 084 - 231251

Warri 24, Effurun/ Sapele Road Warri Tel: 08037552610

Reinsurance Plaza Plot 784A, Herbert Macaulay Way, Central Business District,Abuja Tel:09-2342591,08038013816. Fax: 09-2342859

46, Tinubu StreetIta Eko Abeokuta

7, Factory Road Aba Tel: 0805314351

Federal Mortgage Finance 40, Uselu Lagos Road Akpakpava, Benin City Edo State Tel: 052-253019,08023580609 Fax: 052-252680

Henss Building Complex 24/26. Murtala Mohammed Highway Calabar Te1:08036764203

55-59, Chime Avenue Haven Enugu Tel: 08036660737,07038143357

12, Moshood Abiola Way Formally Ring Road Ibadan Oyo State Tel: 02-8105080-1,08023677424

4, Beach Road,Jos, Plateau State Tel: 073-453997,073-459529-30 Fax: 073-459531

Yaman Phone House 1, Constitution Road Kaduna

Abuja

Abeokuta

Aba

Benin

Calabar

Enugu

Ibadan

Jos

Kaduna

Kano

Lagos

Onitsha

Owerri

Portharcourt

Oshogbo

Warri


PROXY FORM



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ADMISSION CARD

Numbers of Shares Held


BOARD OF DIRECTORS

Chief Eugene OkworDirector

Chief R. A. Gbadamosi OFR

Director

Deji AkinyanjuDirector

Sen. Tokunbo OgunbanjoDirector

M.O. SoyomboExecutive Director

Haresh AswaniDirector

O.S. OyedokunExecutive Director

HRH (Dr.) O. Akenzua jpDirector

E.U. EgejuruExecutive Director

S.D.A SobanjoManaging Director/CEO

O. Far.) jeD m( f ire oi kh uC nrmanaihC

MANAGEMENT DIRECTORATE

EXECUTIVE DIRECTORATES.D.A Sobanjo - Group Managing Director/Chief Executive OfficerO. S. Oyedokun - Executive Director Human Resources/Admin. Company Secretary &

Legal Adviser & Chief Compliance Officer.Femi Soyombo - Executive Director, Corporate Services

COMPANY SECRETARIAT

S.A. Oduroye - Company Secretary/Legal Adviser/Chief Compliance Officer

FINANCIAL SERVICES

E.U. Egejuru - Executive Director-Financial ServicesO.O.Otusanya - General Manager/Chief Financial Officer

INFORMATION TECHNOLOGY

Babatunde Fajemirokun - General Manager (Information Technology)

STRATEGIC PLANNING/BUSINESS TRANSFORMATION

Olusola Ajayi - Deputy General Manager (Business Transformation)

HUMAN RESOURCES

Phil Maduagwu - Deputy General Manager, Human Resources

ADMINISTRATION

J.A. Atanda - Assistant General Manager, Administration/Facilities Management

AUDIT SERVICES A.B.C. Amure - Assistant General Manager

LIFE OPERATIONS

F.I. Olabiyi - General Manager, Technical OperationsFemi Ogunleye - Deputy General Manager, MarketingL.B. Ayansina - Assistant General Manager, Life BenefitsS.O.A. Lawal - Assistant General Manager, UnderwritingBenson Ogunyamoju - Assistant General Manager, Life

GENERAL INSURANCE

E.F. Igbiti - General Manager, (General Insurance Operations)Moruff Apampa - Deputy General Manager (General Insurance Marketing)Olatunbosun Oduniyi - Assistant General Manager (Technical)Abayomi A. Ogundipe - Assistant General Manager (Branch Operations)

AIICOEDUCATION LEGACY PLAN



E-mail: Website:

AIICO Insurance Plc



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DIRECTORS, SECRETARY AND PROFESSIONAL ADVISERSFOR THE YEAR ENDED DECEMBER 31, 2009

DIRECTORS:

Chief (Dr.) O. Fajemirokun ChairmanS.D.A. Sobanjo Managing DirectorMr. M.O. Soyombo Executive DirectorMr. O.S. Oyedokun Executive DirectorMr. E.U. Egejuru Executive DirectorHRH (Dr.) O. Akenzua JP DirectorChief Rasheed Gbadamosi DirectorMr. Deji Akinyanju DirectorSen. Tokunbo Ogunbanjo DirectorChief Eugene Okwor DirectorMr. Haresh Aswani Director

SECRETARY/LEGAL ADVISER S. A. Oduroye

AUDITORS: Ernst & Young(Chartered Accountants)2, Bayo Kuku Street,Ikoyi, Lagos

REGISTERED OFFICE: Aiico PlazaPlot PC 12, Afribank Street,Victoria Island,Lagos.

REGISTRARS: United Securities Ltd.14, Idowu Taylor Street,Victoria Island, P.M.B. 12753Lagos.


RESULT AT A GLANCEFOR THE YEAR ENDED DECEMBER 31, 2009


Group Company -Life 2009 2008 % Change 2009 2008 % Change N'000 N'000 Incr./(Decr.) N'000 N'000 Incr./(Decr.)

PROFIT & LOSS ACCOUNT

Investments and other Income

1,595,526

1,632,534 (2) 859,608

1,144,458 (25)

Profit/(loss) before taxation 879,463

1,572,831 (44) (33,825) 527,748

(106)

Profit after taxation 1,044,665

624,759 67 231,347

4,051 (935)

BALANCE SHEET Investments 15,001,268 13,110,705 14 11,174,391 10,914,658 2 Investment in subsidiary - - - 4,000,000 4,000,000 - Fixed Assets 3,240,160 1,939,160 67 2,383,587 1,440,160 66 Share Capital 3,520,082 3,485,337 1 3,520,082 3,485,337 1 Contingency Reserve 948,958 717,571 32 557,516 508,554 10 Insurance Funds 5,694,882 4,038,201 41 4,935,662 3,282,245 50 Deposit Admin & Pension Fund 1,878,798 1,387,814 35 1,878,798 1,387,814 35 Shareholders’ Funds 12,880,884 11,440,644 13 11,129,252 10,628,429 5 Total Assets 24,827,237 20,731,912 20 22,079,652 20,313,027 9 PER 50K SHARE DATA

Earnings per Share (Kobo) 15

9 3

0.1

Net Assets Per Share(Kobo) 183

164 158

152

Total Assets Per Share (Kobo) 353

297 314

291 Stock Exchange Quotation (Kobo) 79

179 79

179

Number of Shareholders

125,146

180,609 125,146

180,609

Number of Employees 301 293 192

178

UNCLAIMED DIVIDENDS AND SHARE CERTIFICATESFOR THE YEAR ENDED DECEMBER 31st 2009

AIICO had declared the following dividends and made public issues including bonuses since it became a public company in July 1989

DIVIDEND NO DATE th 01 15 November, 1990th

02 20 November, 1991rd

03 23 August, 1993th04 17 October, 1994th

05 29 May, 1995th06 5 October, 1998

th07 20 September, 2001

th08 18 August, 2003th09 8 September, 2004

ISSUESAllotment '90Rights '93Bonus '94Bonus '95Bonus '96Bonus '97Bonus 2001Bonus 2003Rights 2003Bonus 2005Public Offer 2005Rights 2005Bonus 2006Public Offer 2007

According to our record, some unpaid dividend warrants have not been returned to the Company for revalidation and subsequent payment. Also about 2,800 share certificates have been returned unclaimed. The 20 All affected AIICO shareholders are hereby requested to contact the following addresses for collection of their dividend warrants or/and certificates yet unclaimed.

1. For dividend warrants please contact:-Company SecretaryAiico Insurance PlcAiico PlazaAfribank Street, Victoria IslandP.O Box 2577 Lagos

2. For share certificates please contact:-The RegistrarUnited Securities Limited14, Idowu Taylor StreetVictoria Island, Lagos.

125,146 , , ,


AIICOAnnuity Plan



E-mail: Website:

AIICO Insurance Plc



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GRAPHIC ILLUSRATIONS


CHAIRMAN’S STATEMENT

11

O. Fa)r. jeD m( f ire oi kh uC nmanirahC

Distinguished Fellow Shareholders, Guests, Ladies and Gentlemen, thI welcome you all, on behalf of the Board of Directors, to the 40 Annual General Meeting of our

great Company Aiico Insurance Plc., holding at Calabar, Cross Rivers State. The occasion is an opportunity to review the performance of the Company and to present to you, the Annual Report

stand Accounts for the year ended 31 December, 2009.

As a prelude to that presentation, I will briefly highlight some of the key factors that have affected our performance over the period.

Business Environment:

The global economy continued to be impacted by the financial crises of 2008, with weak global demand, and credit contraction inhibiting global output in 2009. Across the globe, different governments had to employ stimulus packages to induce demand and to lower uncertainty and reduce systemic risks in their financial markets.

COMPANY FIVE-YEAR FINANCIAL SUMMARY - LIFEFOR THE YEAR ENDED DECEMBER 31, 2009

2009 2008 2007 2006 2005

ASSETS =N=000 =N=000 =N=000 =N=000 =N=000

Cash and bank balances 666,284 741,593 758,513 474,922 316,427

Short-term investments 8,112,908 8,803,912 1,898,589 2,259,037 1,523,325

Debtors and prepayments 850,142 676,959 1,292,853 588,815 959,319

Loan to policy holders 852,553 714,607 574,257 425,651 332,111

Long-term investments 3,061,483 2,110,746 3,910,520 1,754,758 4,474,866

Investment in subsidiary 4,000,000 4,000,000 - - -

Statutory deposit 200,000 200,000 500,000 35,000 35,000

Fixed assets 2,383,587 1,440,160 1,986,789 2,982,081 3,088,640

Goodwill on Consolidation 1,166,609 1,166,609 1,166,609 - -

Deferred taxation 786,086 458,441 881,295 183,891 -

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

TOTAL ASSETS 22,079,652 20,313,027 12,969,425 8,704,155 10,729,688

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

LIABILITIES

Creditors and accruals 1,896,109 1,506,939 2,620,776 1,637,344 1,157,347

Intercompany 1,726,784 2,875,712 - - -

Outstanding claims 239,668 271,497 239,884 165,944 172,533

Taxation 263,299 350,279 323,895 51,008 6,253

Dividend 10,080 10,112 10,161 10,199 3,788

Insurance funds 4,935,662 3,282,245 3,012,522 2,577,067 2,430,978

Deposit Admin/Pension Funds 1,878,798 1,387,814 1,527,919 (530,662) 3,765,427

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

10,950,400 9,684,598 7,735,157 3,910,900 7,536,326

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

TOTAL ASSETS LESS LIABILITIES 11,129,252 10,628,429 5,234,268 4,793,255 3,193,362

========= ========= ======== ======== =======

CAPITAL AND RESERVES:

Called-up share capital 3,520,082 3,485,337 1,873,757 1,332,765 700,000

Contingency reserve 557,516 508,554 455,779 368,619 299,654

Fixed assets revaluation reserve 764,538 461,447 566,248 1,246,745 1,246,745

Quoted investment revaluation reserve 414,695 448,310 1,543,332 427,337 661,180

Bonus issue reserve 880,020 - - 222,128 175,000

General reserve (772,105) (954,490) (905,766) 521,484 106,747

Share premium 5,764,506 6,679,271 1,700,918 674,177 4,036

` ---------------- --------------- --------------- --------------- --------------

SHAREHOLDERS’ FUNDS 11,129,252 10,628,429 5,234,268 4,793,255 3,193,362

========= ========= ======== ======== =======

PREMIUM AND PROFITS

Premium 4,899,678 3,581,145 4,675,776 3,030,487 2,931,822

(Loss)/Profit before taxation (33,825) 527,748 (186,816) 348,799 86,947

Profit after taxation 231,347 4,051 304,709 483,702 81,810

Earnings per share 3 0.1 -5 13 6

Adjusted Earnings per share 3 0.1 -3 5 1

Bonus issue per share - - 8.33k 12.50k

Net assets per share 158k 168k 168k 215k 305k

Total assets per Share 314k 291k 346k 320k 766k

Note: Adjusted Earnings per share of N0.50 has been calculated based on the number of shares issued


CHAIRMAN’S STATEMENT (continued)

These measures yielded significant results in the global economy, particularly in the last quarter of 2009. The downturn in the world economy abated with many key economies getting out of recession by year end. United States, a number of countries in the Euro Zone, China and Asia fared better than expected.

In Africa, the impact of the global economic crisis on nations remained a function of the degree of their exposure to the global economy. Most African countries were affected by weak export demand, low oil and commodity prices, low credit penetration and weak capital inflows.

For Nigeria, the effect of the global financial crisis continue to filter into the nation's economy partly through trade and capital flight as the local stock market bowed to selling pressure. The Nigerian Stock Exchange All-Share Index closed the year at 20,827.17 points, a 33.8% decrease over the preceding year's figure of 31,450.78 points. Turnover dropped by a whopping N685.72bn, a 71.2% decline, when compared with the turnover of N2.4tn recorded in 2008. The market value of the 216 listed equities closed the year at N4.9tn, down by 28.9% from the N6.9tn opening value at the beginning of the year.

In the banking sector of the economy, CBN's special audit revealed liquidity, capital adequacy and corporate governance challenges in 10 banks. This led to the removal of the management team of eight of the banks. The CBN further injected N620bn to support the affected banks. The consequences of the intervention of the CBN was the near total absence of access to credit facilities by customers of these banks especially companies and entrepreneurs, leading to low foreign portfolios investment, and low investor confidence.

Revenue derivable from oil also declined. Although oil prices averaged US$61 per barrel, this remained well above the budget benchmark of US$45.00 per barrel. Since output averaged 1.7m barrel per day, as against the 2.29m barrels per day budgeted, the expected benefits were lost, as external reserves hovered around US$42.41bn for the major part of the year, a 19.7% decrease over last year's figure of US$52.82 bn. This translates into an aggregate decline of 35% over the 2008 position. This dealt a massive blow on the Federal Governments revenue projection. Government sought to augment the shortfall in the Federal Revenue Account by drawing from the Excess Crude Oil Account.

In the power sector, the Federal Government's target of 6,000 megawatts per hour of power generation for the year could not be met, and inadequate power supply posed further challenges to industrial capacity utilization, economic recovery and development since businesses had to generate their own energy.

Overall the real gross domestic product growth rate in 2009 was estimated at a paltry 6.9%. Single digit inflation target of 8.2% was not achieved as general price increases averaged 12.4% for 2009.

Infrastructural development was slow, businesses still generate their own energy, expend huge time and cost in the haulage of products from one part of the country to another because of the deplorable state of our roads. Multiplicity of taxes and constant harassment by agents of Local Governments of businesses are on the increase. The issue of kidnaping in major parts of the South-East and South-South region, was a major challenge to people and businesses during the year under review, as businesses had to invest heavily in security.

As a result of these challenges and falling oil revenues, Standard & Poor's reduced Nigeria's sovereign credit rating from A- to B+ as at August 2009.

The efforts of the Federal Government must however be acknowledged. The Amnesty deal has brought some measure of stability into the Niger Delta Region, the banking industry reforms and the passage of the Asset Management Corporation (AMC) had statutory effects on the financial sector of the economy, and the increased attention to the problem of infrastructural decay will on the long run, benefit our economy.

STRENGTH STABILITY SECURITY TRUST2009 Annual Report & Accounts 65

GROUP FIVE-YEAR FINANCIAL SUMMARYFOR THE YEAR ENDED DECEMBER 31, 2009

2009 2008 2007 2006 2005 ASSETS N’000 N’000 N’000 N’000 N’000 Cash and bank balances 1,827,516 1,263,561 758,513 474,922 316,427

Short-term investments 11,210,179 10,110,204 1,898,589 2,259,037 1,523,325 Debtors and prepayments 1,424,172 1,578,173 1,292,853 588,815 959,319

Deferred acquisition costs 105,858 105,620 - - - Loan to policy holders 852,553 714,607 574,257 425,651 332,111

Long-term investments 3,791,089 3,000,501 3,910,520 1,754,758 4,474,866 Statutory deposit 500,000 500,000 500,000 35,000 35,000 Fixed assets 3,240,160 1,939,160 1,986,789 2,982,081 3,088,640

Goodwill on Consolidation 1,166,609 1,166,609 1,166,609 - - Deferred taxation 709,101 353,477 881,295 183,891 - -------------- ------------- ------------- ------------ ------------- TOTAL ASSETS 24,827,237 20,731,912 12,969,425 8,704,155 10,729,688 --------------- ------------- ------------- ------------ ------------- LIABILITIES Creditors and accruals 2,714,112 2,661,359 2,620,776 1,637,344 1,157,347

Outstanding claims 938,984 524,092 239,884 165,944 172,533 Taxation 709,497 669,690 323,895 51,008 6,253

Dividend 10,080 10,112 10,161 10,199 3,788 Insurance funds 5,694,882 4,038,201 3,012,522 2,577,067 2,430,978 Deposit Admin/Pension Funds 1,878,798 1,387,814 1,527,919 (530,662) 3,765,427 --------------- ------------ ------------ ------------ -------------- 11,946,353 9,291,268 7,735,157 3,910,900 7,536,326 --------------- ------------- ------------ -------------- -------------- TOTAL ASSETS LESS LIABILITIES 12,880,884 11,440,644 5,234,268 4,793,255 3,193,362 ========= ======== ======= ======= ======= CAPITAL AND RESERVES: Called-up share capital 3,520,082 3,485,337 1,873,757 1,332,765 700,000

Contingency reserve 948,958 717,571 455,779 368,619 299,654 Fixed assets revaluation reserve 1,029,009 461,447 566,248 1,246,745 1,246,745

Quoted investment revaluation reserve 467,830 639,817 1,543,332 427,337 661,180 Bonus issue reserve 880,020 - - 222,128 175,000 General reserve 270,479 (542,799) (905,766) 521,484 106,747

Share premium 5,764,506 6,679,271 1,700,918 674,177 4,036 --------------- -------------- -------------- -------------- --------------

SHAREHOLDERS’ FUNDS 12,880,884 11,440,644 5,234,268 4,793,255 3,193,362 ========= ======== ======== ======== ========

PREMIUM AND PROFITS

Premium 8,799,198 7,474,253 4,675,776 3,030,487 2,931,822 Profit /(Loss) before taxation 879,463 1,572,831 (186,816) 348,799 86,947

Profit after taxation 1,044,665 624,759 304,709 483,702 81,810 Earnings per share 15 9 8 18 6

Adjusted Earnings per share 15 9 4 7 1 Bonus issue per share - - - 8.33k 12.50k Net assets per share 183 180 168 215k 305k

Total assets per Share 353 297 346 320k 766k Note: Adjusted Earnings per share of N0.50 has been calculated based on the number of shares issued


Trust...ten decades of consistency meeting the expectations ofour customers.




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The Insurance Industry:The ongoing reform in the financial sector has not spared the Insurance Industry. The National Insurance Commission (NAICOM) took a decision to change the financial reporting format for all companies in the industry to follow the IAS (International Accounting Standards) retroactively, and as a result of this, most players in the industry have had to grapple with the attendant pressure. The net effect of this change is expected to make the industry stronger with adequate capacity to withstand systemic shocks usually triggered by inadequate or compromised capital base.

The unfavorable business environment characterized by sluggish economic growth and weak infrastructure continued to create very serious challenge to our business. The financial turmoil was further aggravated by stiff competition and unscrupulous practices.

Despite the harsh operating environment, we are confident of a brighter future for insurance business in Nigeria. If the Market Development and Restructuring Initiatives (MDRI) that was unveiled in August 2009 by the National Insurance Commission (NAICOM) is properly implemented, the industry will witness a rapid growth of insurance premium and provision of jobs in the sector.

Meanwhile, our company is assiduous to build on the growth and expansion strategies without losing focus on quality underwriting and risk management acumen.

As a demonstration of our commitment towards the provision of total quality service that would surpass customer expectations, we have commenced the enhancement of our automated service delivery by acquiring Enterprise Wide Risk Management (ERM) System to complement both the business process and our rejuvenated website. This step will further provide value addition to our clients and present our Company with significant opportunities.

Operating ResultsDespite the challenging environment, your company was able to achieve its fundamental objective of consistent profitability and sustainable growth. Total Gross Premium underwritten for the year increased by N1.3 billion, i.e. 17.73%. Premium income for the Life Business recorded a 36.8% growth, but had to be credited to revenue account, to increase the life fund. This is in compliance with directives of the National Insurance Commission that all insurance companies should revert to the Fund Accounting format for reporting their financials effective 2009.

However, during the year under review, your Company made a profit after tax of N1.04 billion as against the N625 million made in 2008, representing a growth of 67.21%. Shareholders' Fund grew by closing at N12.88 billion, while total asset of your Company increased by 19.75%, to close at N24.83 billion.

Dividendst

Dear Shareholders, for the financial year ended 31 December, 2009, the Board of Directors is pleased to recommend to you, at this Annual General Meeting, the payment of a total of N220m (Two hundred and twenty-two Million

thNaira) representing 2k per ordinary share of fifty kobo each. This dividend will be payable, if approved on the 25 October, 2010 to shareholders subject to deduction of appropriate withholding tax.

Board of DirectorsAt this meeting, myself, Mr. 'Deji Akinyanju, together with Chief Eugene Okwor will be retiring by rotation in accordance with the provision of the Articles of Association of the Company, and being eligible, offer ourselves for re-election.



Also during the year under review, two Executive Directors, Mr. E. U. Egejuru, the former Chief Financial Officer, and your erstwhile Company Secretary/ Legal Adviser Otunba 'Tunji Oyedokun, retired from the services of the Company after many years of meritorious services to the Company. On your behalf, and on behalf of the Board, we thank them both for their immense contribution to the growth of this Company.

In keeping with the Company's Succession plan, Mr. Femi Soyombo, former General Manager Strategic Planning, was elevated to the Position of Executive Director Corporate Services, while Mr. Samuel Oduroye, formerly the Assistant General Manager (Legal & Admin) has been appointed by your Board to the position of Company Secretary/Legal Adviser. On your behalf, I wish them success in their new assignments.

Record of Director's Attendance At Board MeetingsFurther to the provisions of Section 258 (2) of the Companies and Allied Matters Act, cap C20, Law of the Federation of Nigeria 2004, the Record of Director's attendance at Board Meetings during the year under review is available at this Annual General meeting for Inspection.

Directors Interest in Contracts.None of the Directors has notified the Company for the purpose of Section 277 of the Companies and Allied Matters Act (Cap. 20) Laws of The Federation of Nigeria) 2004 of their direct or indirect interest in any contract or proposed contract with the Company during the year under review.

The Standing Committees of the BoardThe Board, in compliance with the guidelines of the National Insurance Commission carried 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.

The Board functions through these committees, whose membership are as follows:-

1. Investment Committee

- Chief Rasheed Gbadamosi Chairman

- Mr. Buki Oluwadiya Member

- Mr. S.D.A. Sobanjo Member

- Mr. O. O. Otusanya Member

- Mr. 'Dipo Oguntuga Member

2. Finance & General Purpose Committee

- Chief Rasheed Gbadamosi Chairman

- Mr. Buki Oluwadiya Member

- Mr. Kayode Soyombo Member


- Mr. M. O. Soyombo Member

- Mr. O. O. Otusanya Member

- Mr. Dipo Oguntuga Member

63

Group Company –Life

2009 2008 2009 2008

N'000 % N'000 % N'000 % N'000 %

Premium earned 8,799,198 7,474,253 4,899,678 3,581,145

Investment and other income 1,735,311 2,110,725 999,393 1,622,649

10,534,509 9,584,978 5,899,071 5,203,794

Re-insurances, claims, maturities,

surrenders, commission and services

(8,380,908) (7,126,040) (5,157,761) (4,056,010)

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

Value added 2,153,601 100 2,458,938 100 741,310 100 1,147,784 100

========= === ========= === ======== === ======== ===

Value added is applied as follows:

In payment for employees:

Salaries and wages 1,071,569 50 712,628 29 645,618 87 497,536 43 Payment to Government:

Taxation 190,422 9 420,254 17 62,473 8 100,843

9

Retained for replacement of assets and

expansion of the business:

- Depreciation 202,569 9 173,479 7 129,517 17 122,500 11

- Contingency reserve 231,387 11 261,792 11 48,962 7 52,775

5

- Profit / (Loss) 813,278 38 362,967 15 182,385 25 (48,724) (4)

- Deferred taxation (355,624) (17) 527,818 21 (327,645) (44) 422,854 36

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

2,153,601 100 2,458,938 100 741,310 100 1,147,784 100

======== === ======== === ======== === ======== ===

This statement represents the distribution of the wealth created through the use of the Company's assets and its employees' efforts.


STATEMENT OF VALUE ADDEDFOR THE YEAR ENDED DECEMBER 31, 2009



AIICOCORPORATE SAVINGS PLAN



E-mail: Website:

AIICO Insurance Plc



RC: 7340

3. Real Estate Committee

- HRH Prince (Dr.) O. Akenzua Chairman

- Senator Tokunbo Ogunbanjo Member

- Mr. 'Deji Akinyanju Member



4. Establishment Committee

- Chief Eugene Okwor Chairman

- Mr. Deji Akinyanju Member



5. Audit Committee

- Chief Simeon Odubiyi Shareholder/Chairman

- Evang. Soares Akinola Shareholder/Member

- Mr. Omodiale Amiolemeh Shareholder/Member

- Chief Rasheed Gbadamosi Member

- Chief Eugene Okwor Member

- HRN (Dr.) Prince O. Akenzua Member

All the committees endeavoured to perform their duties competently during the year under review. Permit me to thank them and encourage them not to relent in their efforts .

Corporate Social Responsibility

Aiico is dedicated to strengthening the fabric of communities in which it does business. During the year under review, the Company partnered with the Eti-Osa Local Government and donated furniture to the various Secondary Schools in the area. In recognition of the impact of a clean environment, a bob-cart valued at N7.3m was also donated to the State government, to help in its efforts at clearing the drains within the Lagos island environment, thus reducing the impact of flooding in this area. The company will continue to partner with the various agencies within its business environment towards ensuring a clean and tidy environment for business.

Management & Staff

The efforts of employees of this great company cannot be over-emphasized. Both staff and management, through dedication to duties and uncommon loyalty contributed immensely to the achievements being celebrated today. Please join me in expressing our sincere appreciation of their efforts. In return the Company will continue to invest in quality training and development, both locally and internationally, with a view to ensuring staff are equipped for the challenges of our ever-changing economic environment. The quest of your company to be amongst the leading employers, we assure you will not be abandoned. The cordial industrial relations, based on mutual understanding between management and the unions, we hope will continue, so as to endure that together, we re-assert our position as our Country's leading insurer and the best provider of financial services.

Conclusion

Finally, I will, on your behalf, express my sincere thanks to my colleagues on the Board, for their meaningful contributions to the growth and success of this great Company, the Management and staff for their selfless service despite the challenging operating environment, and my appreciation to our numerous policy holders, agents and brokers for their unflinching support.

Thank you and God bless.

AIICOMORTGAGE PROTECTION

POLICY



E-mail: Website:

AIICO Insurance Plc



RC: 7340


NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2009 (continued)

34. GUARANTEES AND OTHER FINANCIAL COMMITMENTS

i. Contingent liabilitiesContingent liabilities in respect of pending litigations involving the Company amounted to N2,162,689,210 (2008: N 1,805,518,353). The Directors have been advised by counsel that the liability arising there from will not exceed N 32,606,396 (2008 – N 37,713,634). This has not been provided for in these financial statements. The actions are being defended and the directors are of the opinion that no material liability would arise there from.

ii. Financial commitmentsThe directors are of the opinion that all known liabilities and commitments relevant in assessing the Company's state of affairs have been taken into account in the preparation of these financial statements.

35. POST BALANCE SHEET EVENT

No events or transaction have occurred since the balance sheet date which would have a materialeffect upon the financial statements at that date or which would need to be mentioned in thefinancial position or result of operations.

36. CAPITAL COMMITMENTS

The Company had a capital commitment for renovation of its head office as at December 31, 2009 of N 19.5 million (2008: N70 million )

37. RECLASSIFICATIONS

Certain reclassifications were made to the reported figures of the prior year in order to conform to this year's presentation.

38. APPROVAL OF FINANCIAL STATEMENTSThe Board of Directors of the Company approved these financial statements on July 5, 2010.


REPORT OF DIRECTORSFOR THE YEAR ENDED DECEMBER 31, 2009

The Directors have pleasure in submitting to the members of the Company their report on the affairs of Aiico Insurance Plc (“the Company”) and its subsidiary Company (“together referred to as the group”) with the consolidated audited financial statements for the year ended December 31, 2009.

PRINCIPAL ACTIVITIES

The principal activities of the Company include provision of Life Insurance services to Individual and Corporate customers, and Financial Services.

RESULTS FOR THE YEAR Group Company - Life

N'000 N'000

Profit for the year after taxation 1,044,665 231,347

Less: appropriations:Transfer to contingency reserve (231,387) (48,962)Transfer to general reserve (813,278) (182,385)

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

======== =========FIXED ASSETS

Information relating to fixed assets is contained in note 8 to the financial statements.

DONATIONS

Donations during the year ended December 31, 2009 amounted to N3,380,000 (2008: N695,000) as follows:

2009 N

1. Chartered Insurance Institute of Nigeria 2,000,000

2. Institute of Directors of Nigeria 1,000,000

3. Association of Pension Fund of Nigeria 300,000

4. Nigeria Insurance Association 65,000

5. Methodist Boys High School 15,000

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

Total 3,380,000

=========

2009 Annual Report & Accounts60


CHAIRMAN AND DIRECTORS' EMOLUMENTS Group Company

2009 2008 2009 2008 N’000 N’000 N'000 N'000

Emolument 32,983 27,558 20,272 14,347

Fees 1320 1,358 700 648

As executive 34,303 28,916 20,972 14,995

Chairman 2640 2,628 720 708

The highest paid director 7,582 4,355 7,582 4,355

The number of directors (including the Chairman) whose emoluments were within the following ranges were:

Company 2009 2008 N N Number Number

50,001 ---- 1,000,000 7 7 1,500,001 ---- 1,990,000 2 2

1,990,001 ---- 2,000,000 - - 2,000,001 ---- 3,900,000 1 1 4,790,001 ---- 4,800,000 - -

5,370,001 ---- 9,700,000 - -

33. STAFF Group Company -Life 2009 2008 2009 2008

The average number of persons employed as at the end Number Number Number Number

of the year was: Managerial 41 39 28 24 Senior staff 235 242 143 146 Junior staff 25 12 21 8 301 293 192 178

The staff costs for the above persons were:

N'000 N'000 N'000 N'000 Wages and Salaries 996,783 622,107 588,756 466,474 Other staff costs 74,786 90,521 56,862 31,062 1,071,569 712,628 645,618 497,536

The number of employees in receipt of emoluments (excluding pensions and allowances) above =N=60,000 in the year were

Group Company 2009 2008 2009 2008 N N Number Number Number Number 60,001 ---- 100,000 1 4 1 2 100,001 ---- 150,000 74 68 42 32 150,001 ---- 200,000 61 59 37 37 200,001 ---- 250,000 47 51 36 43 250,001 ---- 300,000 30 25 24 18 300,001 ---- 350,000 13 19 8 11 350,001 ---- 400,000 17 9 12 8 400,001 ---- Above 58 58 32 27 301 293 192 178

32.

2009 Annual Report & Accounts 5918 2009 Annual Report & Accounts

REPORT OF DIRECTORSFOR THE YEAR ENDED DECEMBER 31, 2009 (continued)

DIRECTORS AND DIRECTORS’ INTEREST

Directors' interest The names of the Directors at the date of this report and of those who have held office including their shareholdings during the year are as follows:

Number of Shares December 31, December 31,

Directors 2009 2008

Chief (Dr) O. Fajemirokun - Chairman 511,081,277 510,067,945

Mr. S.D.A Sobanjo - Managing Director/CEO 734,916 534,916

Mr. O.S. Oyedokun - Executive Director, (Retired 01/06/2010) 265,416 183,750

Mr. E.U Egejuru - Executive Director, (Retired 31/12/2009) 558,003 558,003

Mr. Femi Soyombo - Executive Director, (Appointed 18/11/2009) 137,416 -

Prince (Dr.) O. Akenzua, JP 1,461,442 1,461,442

Chief R.A. Gbadamosi OFR 2,152,161 2,152,161

Chief Eugene Okwor 3,479,166 1,029,166

Mr. Haresh Aswani (Indian) - -

Senator Tokunbo Ogunbanjo 1,547,866 1,547,866

Mr. Deji Akinyanju - -

Directors' interest in contractsNone of the directors has notified the Company for the purpose of section 277 of the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004 of any disclosable interest in contracts in which the Company was involved during the year ended December 31, 2009.

RESPONSIBILITIES OF DIRECTORS

In accordance with the provisions of Sections 334 and 335 of the Companies and Allied Matters Act, CAP 20, Laws of the Federation of Nigeria 2004, the Company's Directors are responsible for the preparation of financial statements which give a true and fair view of the state of affairs of the Company as at the end of the financial year and of its financial performance and cash flows for the year and comply with the provisions of the Act. These responsibilities include ensuring that:

i) adequate internal control procedures are instituted to safeguard the assets and prevent and detect fraud and other irregularities;ii) proper accounting records are maintained;iii) applicable accounting standards are followed;iv) suitable accounting policies are used and consistently applied;v) the financial statements are prepared on the going concern basis unless it is inappropriate to presume that the

Company will continue in business.


30 RECONCILIATION OF OPERATING PROFIT/(LOSS) TO

CASH PROVIDED BY OPERATING ACTIVITIES

Group Company-Life

2009 2008 2009 2008

N'000 N'000 N'000 N'000

Operating profit /(loss) before taxation 879,463 1,572,831 (33,825) 527,748

Adjustment to reconcile Net profit/(loss)

To net cash provided/(utilized):

Loss /(Profit)on Sale of Fixed assets 11,069 (85,618) 13,776 (84,472)

Profit on sale of investments (28,371) (10,595) (2,847) (10,595)

Depreciation 202,569 173,479 129,517 122,500

Investment income (1,469,001) (1,752,663) (859,839) (1,296,713)

Diminution in value of investments 28,474 389,767 28,474 363,695

Change in assets and liabilities:

Increase in loan to policyholders (137,946) (140,350) (137,946) (140,350)

Increase in creditors 135,049 256,734 410,961 (815,790)

Increase in intercompany payable - - (1,148,928) 2,875,712

Increase in outstanding claim 414,892 284,208 (31,829) 31,613

Increase in debtors 154,001 (285,320) (173,183) 615,894

Increase in deferred acquisition costs (238) (105,620) - -

Increase in insurance funds 1,440,453 885,574 1,437,189 129,618

Tax Paid (150,615) (74,459) (149,453) (74,459)

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

1,479,796 1,107,968 (517,936) 2,244,401

======= ====== ====== ========

31. CASH AND CASH EQUIVALENTS Group Company 2009 2008 2009 2008

N’000 N’000 N'000 N'000

Cash and Bank balances 1,827,516 1,263,561 666,284 741,593 Short term investments 11,210,179 10,110,204 4,805,291 8,803,912 Bank Overdraft (49,419) (131,712) (28,028) (49,816) 9,680,659 11,242,053 5,443,547 9,495,689



SHAREHOLDINGS

1. Substantial interest in shares

The shares of the Company are beneficially held as follows:

2009 2008 Number of Number of Shares held % shares held %

Aiico Bahamas Limited 816,666,666 12 816,666,666 12

Others 6,223,496,918 88 6,154,008,064 88

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

7,040,163,584 100 6,970,674,730 100

=========== === =========== ===

No individual, except as disclosed above, held more than 10% of the issued share capital of the Company as at December 31, 2009.

2. Range analysis of shareholdings at December 31, 2009:

Number of Number of PercentagesHolders shares Shareholding

1 - 1,000 3,457 2,248,516 0.03

1,001 - 10,000 72,182 431,188,791 6.13

10,001 - 100,000 45,447 1,158,213,951 16.45

100,001 - 500,000 3,335 656,163,192 9.32

500,001 - 1,000,000 354 259,198,401 3.68

1,000,001 - 5,000,000 289 571,002,897 8.11

5,000,001 - 10,000,000 40 280,504,574 3.98

10,000,001 - 50,000,000 32 689,661,076 9.80

50,000,001 - 100,000,000 5 340,300,335 4.83

100,000,001 - 5,000,000,000 5 2,651,681,851 37.67

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

Total 125,146 7,040,163,584 100.00

====== ============ =====


2009 2008

N'000 N'000

27 REINSURANCE COST

Reinsurance Premium Written 283,973 302,621

Increase in reinsurance prepaid (238) (20,663)

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

283,735 281,958

======= ========

28 CHANGE IN OUTSTANDING CLAIMS RESERVE 2009 2008

N'000 N'000

28.1 Company - Life

Outstanding claims- Closing 239,668 271,497

Outstanding claims- Opening (271,497) (128,018)

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

(Decrease)/Increase in outstanding claims (31,829) 143,479

======= =======

28.2 Company - General

Gross Claims Outstanding 635,742 229,632

Provision for IBNR 63,574 22,963

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

Outstanding claims- Closing 699,316 252,595

Outstanding claims- Opening (252,595) (111,865)

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

Increase in outstanding claims 446,721 140,729

======= =======

Group Company - Life

29 PROFIT BEFORE TAXATION 2009 2008 2009 2008

N'000 N'000 N'000 N'000

This is stated after charging/(crediting):

Depreciation 202,569 173,479 129,517 122,500

Auditor's remuneration 16,000 12,000 9,000 7,000

Directors' emoluments - 28,916 - 14,995

Profit on Sale of investments (28,371) (10,595) (2,847) (10,595)

Loss /(Profit)on Sale of Fixed assets 11,069 (85,618) 13,776 (84,472)

Income from quoted investment (119,471) (44,872) (92,375) (37,026)

Pension Contribution 55,677 37,001 34,787 25,405

====== ====== ====== ========



EMPLOYMENT OF DISABLED PERSONS

The Company had one physically challenged person in its employment as at December 31, 2009. It is the

Company's policy to consider disabled persons for employment if academically and medically qualified. All

employees are given equal opportunities to develop.

HEALTH, SAFETY AT WORK AND WELFARE OF EMPLOYEES

Health and safety regulations are in force within the premises of the Company. The Company provides subsidy

towards transportation, housing, lunch and medical expenses to all employees.

EMPLOYEES' INVOLVEMENT AND TRAINING

The Company is committed to keeping employees fully informed as much as possible regarding its performance

and progress and in seeking their view whenever practicable on matters which particularly affect them as

employees.

The Company's skill-base has been expanded by a range of training courses provided to its employees, whose

opportunities for career development within the Company have thus been enhanced.

AUDITORS

BY ORDER OF THE BOARD

COMPANY SECRETARY/

LEGAL ADVISER

Lagos, Nigeria

July 5, 2010

Our appreciation goes to our outgoing Auditors, Messrs Ernst & Young for their past services. They will be

stepping down in compliance with both Section 33.2 of the Securities and Exchange Commission's Code of

Corporate Governance, and Section 22.1 National Insurance Commission’s 2010 Guidelines on the tenure of

appointed External Auditors.

In accordance with Section 357(3) of the Companies and Allied Matters Act, Cap C20, LFN 2004, a resolution will

be proposed at this meeting to authorize the directors to seek a replacement and fix the remuneration accordingly.


25 ANALYSIS OF INCOME

The analysis of premium and profit by business class are as follows:

--------------- Premium --------------- ---------- Profit/(Loss) --------- 2009 2008 2009 2008

N'000 N'000 N'000 N'000 Fire 777,237 624,400 109,928 126,019 Motor 1,355,199 1,102,272 338,601 6,412 Workmen Compensation 172,157 203,142 16,663 121,603 Marine 547,558 730,830 207,526 451,163 Personal accident 11,677 90,151 (19,446) (67,924) Casualty accident 1,035,692 1,142,313 260,016 407,810

------------ ------------ ------------ ------------ 3,899,520 3,893,108 913,288 1,045,083

======= ======= ======= ========

26 INVESTMENT AND OTHER INCOME 2009 2008 Group N'000 N'000 Investments 1,329,216 1,274,472 Profit on sale of Investments 28,371 10,595 Profit on sale of Fixed Assets 2,707 85,618 Exchange gain 140,386 194 Others 94,846 261,655

----------- -------------- 1,595,526 1,632,534 ======= ========26.1 Company - Life Investments 720,054 818,522 Profit on sale of Investments 2,847 10,595 Profit on sale of Fixed Assets - 84,472 Exchange gain 54,132 194 Others 82,575 230,675

----------- -------------- 859,608 1,144,458 ======= ========26.2 Company - General

Investments 609,162 455,950 Profit on sale of Investments 25,524 - Profit on sale of Fixed Assets 2,707 1,146 Exchange gain 86,254 - Others 12,271 30,980

----------- -------------- 735,918 488,076 ======= ========



Stability...in & out of seasons, our customers staying ability is solid.



RC: 7340



2009 200822.1 Company - Life N'000 N'000 At January 1, 448,310 1,543,332 Transfer to Aiico General Insurance Company Limited - (578,440) Decrease during the year (33,615) (516,582)

----------- ------------- At December 31, 414,695 448,310 ====== ======

22.2 Company - General At January 1, 191,507 - Transfer from Aiico Insurance Plc - 578,440 Decrease during the year (138,372) (386,933)

----------- ------------- At December 31, 53,135 191,507 ====== ======

23 GENERAL RESERVE Group At January 1, (542,799) (905,766) Transfer from Profit & Loss Account 813,278 362,967

----------- ----------- At December 31, 270,479 (542,799) ====== =======

23.1 Company - Life At January 1, (954,490) (905,766) Transfer from Profit & Loss Account 182,385 (48,724)

------------- ------------ At December 31, (772,105) (954,490)

======== ========

23.2 Company - General At January 1, 411,691 - Transfer from Profit & Loss Account 630,893 411,691

------------ ---------- At December 31, 1,042,584 411,691 ======= =======

24 SHARE PREMIUM Group Company - Life 2009 2008 2009 2008 N'000 N'000 N'000 N'000

At January 1, 6,679,271 1,700,918 6,679,271 1,700,918 Additions during the year - 4,978,353 - 4,978,353 Transfer to Share Capital (34,745) - (34,745) - Transfer to Bonus Issue reserve (880,020) - (880,020) -

------------ ------------ ------------ ------------ At December 31, 5,764,506 6,679,271 5,764,506 6,679,271 ======= ======= ======= =======

2009 Annual Report & Accounts2009 Annual Report & Accounts22

REVIEW OF OPERATIONSFOR THE YEAR ENDED DECEMBER 31, 2009

LIFE OPERATIONS

The adverse economic situation that prevailed for the greater part of 2009 notwithstanding, our Life Business was able to sustain its growth potential by recording an increase of 37%.

The gross premium income rose from N3.58 billion in 2008 to N4.90 billion in 2009. This feat was achieved through our renewed marketing strategy and concerted efforts on the part of our vibrant agency force.

The net premium increased proportionately by 36% from N3.38 billion in 2008 to N4.59 billion in 2009.

The growth in the volume of business especially for the risk based products, the decline in the standard of living and increased health hazards traceable to harsh economic condition contributed to the 30% rise in life claims settled from N324 million in 2008 to N421 million in 2009. Our prudent underwriting process will continue to provide the required platform for proper risk analysis and equitable premium determination.

Declining consumer purchasing power and rise in unemployment rate contributed to the increase in surrender value payments by 55%. N658 million was paid in 2009 compared with N423 million in 2008. Maturity benefit payments declined by 12.5% from N659 million in 2008 to N576 million in 2009.

As the government progresses in the enforcement of Pension Reform Act, an increased momentum of Group Life business is anticipated in the coming year. We are resolute in our quest to identify the needs of our potential customers and ensure that they are adequately met through the provision of appropriate products.

We intend to leverage on our new ICT platform to enhance service delivery to clients.

55

2009 200820.1 Company - Life N'000 N'000 At January 1, 508,554 455,779 Transfer from profit & loss account 48,962 52,775

----------- ----------- At December 31, 557,516 508,554

----------- ----------- 20.2 Company - General

At January 1, 209,017 - Transfer from profit & loss account 182,425 209,017

----------- ----------- At December 31, 391,442 209,017 ====== ======= 21 FIXED ASSETS REVALUATION RESERVE 2009 2008 N'000 N'000 Group

At January 1, 461447 566,248Addition on revaluation/(Reversal on asset disposed) 567,562 (104,801)

------------- -------------At December 31, 1,029,009 461,447

======== ======== 21(i) The Company's leasehold properties were professionally valued in November 2002, 2003 and 2006 by

Adewale Fatokun & Co (Chartered surveyors and valuers) based on the open market value of the properties. The revaluation surpluses arising therefrom were taken to the revaluation reserve in 2002, 2005 and 2009 respectively. The revaluation surplus in 2009 was allocated to shareholders and policy holders at 30% and 70% respectively.The revaluation of Leasehold property is carried out at the discretion of the Directors and is considered as and when necessary.

2009 200821.1 Company - Life N'000 N'000

At January 1, 461,447 566,248Addition on revaluation/(Reversal on asset disposed) 303,091 (104,801)

----------- ------------At December 31 764,538 461,447

====== ========21.2 Company - General

At December 31, 264,471 -======= ========

22 QUOTED INVESTMENTS REVALUATION RESERVE Group At January 1, 639,817 1,543,332 Decrease during the year (171,987) (903,515)

---------- ------------ At December 31, 467,830 639,817

====== =======\


LIFE 55.68%

GENERAL INSURANCE 44.32%

18 SHARE CAPITAL Group Company- Life 2009 2008 2009 2008a. Authorised: N '000 N '000 N '000 N '000

10,000,000,000 ordinary shares 50 kobo each

(2008: 10,000,000,000) 5,000,000 5,000,000 5,000,000 5,000,000 ======== ======== ======= =======

b. Issued and Fully paid:

7,040,164,000 ordinary shares of 50 kobo each (2008: 6,970,674,000)

At January 1, 3,485,337 1,873,757 3,485,337 1,873,757 Increase during the year - 1,611,580 - 1,611,580 Transfer from Share premium reserve (note 18c) 34,745 - 34,745 -

------------- ------------- ------------ ------------- At December 31, 3,520,082 3,485,337 3,520,082 3,485,337

======= ======= ======= ========

c. Aiico Insurance Plc issued 69,488,854 ordinary shares of 50k each represent outstanding shares due to former shareholders of Legacy NFI insurance, which was issued out of share premium account. This has been ratified by the shareholders and approved by the regulatory authorities.

19 BONUS ISSUE RESERVE Group Company - Life 2009 2008 2009 2008 N'000 N'000 N'000 N'000

Transfer from Share premium reserve 880,020 - 880,020 - ----------- ---------- ----------- -----------

At December 31, 880,020 - 880,020 - ======= ======= ======= =======

19(i) During the year, the shareholders of Aiico at its annual AGM ratified the issue of bonus of 1,760,040,896 out of its share premium account to be distributed amongst members at the rate of 1 for every 4 shares held. The issue is yet to be approved by the regulatory authority.

20 CONTINGENCY RESERVE 2009 2008 N'000 N'000 Group

At January 1, 717,571 455,779 Transfer from profit & loss account 231,387 261,792

----------- ----------- At December 31, 948,958 717,571 ====== ======


REVIEW OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009 (continued)

NON LIFE BUSINESS



The industry braced up to face its diverse challenges in 2009, despite the turbulence in the financial sector. NAICOM assisted with the implementation and monitoring of compulsory insurance in Nigeria covering Employers Liability Insurance, Healthcare Professional Indemnity Insurance, Builders Liability Insurance, Occupiers Liability [Public Building] Insurance, Motor Vehicle [Third Party] Insurance and Statutory Group Life Insurance, and also the Oil & Gas Local content compulsory 70% retention in the market.

Due to the increase in awareness, the public is now very conversant with Insurance cover thus leading to a corresponding rise in claims paid. As a result, the company has paid huge sums in claims in recent times reiterating, thus our stand on prompt settlement of all genuine claims. The company, through its strategic focus was able to make a slight positive impact in the industry.

In 2009 our Gross Premium Income increased slightly from N3.893b (2008) to N3.899b also the net premium income grew from N3.345b (2008) to N3.612b showing an increase of 7.98%. The product lines also witnessed positive growth, Fire recorded an increase of 24.84% while the Motor increased by 22.99%.

As stated earlier, the claim outlay increased significantly from N732.17m in 2008 to N1.198b which was 63.58% in the year under review.

The year 2009 was really a challenging one for the Insurance Industry, but our belief is that the future of the industry is very bright. We are determined to grow our retail business going forward by creating more channels of distribution for our products.

LIFE - 30.44%

FIRE - 10.23%

MOTOR - 33.25%

CASUALTY - 16.37%

WORKMEN COMPENSATION -4.42%

MARINE - 3.35%

PERSONAL ACCOUNT - 1.94%

2009 Annual Report & Accounts 2009 Annual Report & Accounts 5324

REPORT OF THE AUDIT COMMITTEEFOR THE YEAR ENDED DECEMBER 31, 2009


2009 200816.1 Company -Life N'000 N'000

Whole life, endowment and group life (note 16.1a) 3,151,741 2,205,536On revaluation of fixed assets (note 16.1b) 1,783,921 1,076,709 ------------ ------------ 4,935,662 3,282,245

======== ========a. Movement on Life fund account

At January 1, 2,205,536 1,530,631Addition on revaluation of fixed assets 946,205 674,905 ------------- ------------At December 31, 3,151,741 2,205,536 ======== ========

b. Movement on revaluation reserve

At January 1, 1,076,709 1,076,709Addition during the year 707,212 - ------------- ------------At December 31, 1,783,921 1,076,709 ======== ========


Fire 110,838 136,511 Motor 345,669 369,581 Workmen Compensation 21,557 19,173 Marine 162,878 62,786 Personal accident 8,631 47,904 Casualty accident 109,647 120,001

------------- ----------- 759,220 755,956

======= =======

Group Company - Life17 DEPOSIT ADMIN & PENSION FUNDS 2009 2008 2009 2008 N'000 N'000 N'000 N'000

Aiico Managed Investment Fund (AMIF) 41,795 73,857 41,795 73,857 Deposit Administration (DA) Reserve 1,837,003 1,313,957 1,837,003 1,313,957

------------ ------------ ------------ ------------- 1,878,798 1,387,814 1,878,798 1,387,814

======= ======= ======= ========

In accordance with the provisions of Section 359 (6) of the Companies and Allied Matters Act, Cap. 59 Laws of the Federation of Nigeria, 1990, we the members of the Audit Committee of Aiico Insurance Plc, having carried out our statutory functions under the Act, hereby report as follows:-

(a) We confirm that the accounting and reporting policies of the Company are in accordance with legal requirements and agreed ethical practices.

(b) That the scope and planning of both the External and Internal Audit Programmes for the year ended 31st December 2009, are satisfactory and adequate to reinforce the Company’s internal control system.

(c) That having reviewed the External Auditor’s findings and recommendations on Management matters, we are satisfied with Management responses thereon.

Finally, we acknowledge and appreciate the co-operation of Management and Staff in the conduct of these duties.

Chief Simeon OdubiyiChairman Audit Committee31st December, 2009

MEMBERS OF THE COMMITTEE ARE:Chief Simeon A. Odubiyi - ChairmanEvangelist Soares AkinolaMr. Amiolemeh OmodialeHRM (Dr.) O. Akenzua JPChief Rasheed GbadamosiChief Eugene OkworThe Company Secretary/Legal Adviser acted as the Secretary to the Committee.


AIICOEXECUTIVE PERSONNEL

PENSION (EPP)



E-mail: Website:

AIICO Insurance Plc



RC: 7340


2009 200814.2 Company - General N'000 N'000a Per profit and loss account Company Income tax 116,506 296,996 Education tax 10,281 22,296 Capital gains tax - 119

------------ -------------- 126,787 319,411 IT development Levy 1,162 - Deferred taxation (27,979) 104,964

------------ -------------- 99,970 424,375 ======= ========b Per balance sheet At January 1, 319,411 - Income taxation for the year 126,787 319,411 Taxation Paid - -

------------ -------------- At December 31, 446,198 319,411 ======= ========

15 DIVIDEND Group Company -Life

2009 2008 2009 2008 N'000 N'000 N'000 N'000

Unclaimed in previous year 10,112 10,161 10,112 10,161 Payments (32) (49) (32) (49)

-------- -------- -------- --------- 10,080 10,112 10,080 10,112 ===== ===== ===== =====

In respect of the current year, the Directors proposed that a dividend of 2 kobo (2008: Nil) per ordinary share will be paid to the shareholders. The dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. Dividend to shareholders is now accounted for on the date of declaration as they do not meet the criteria of present obligation. The proposed dividend is subject to a withholding tax at the appropriate tax rate and is payable to shareholders whose names appear in the register of members as at closure date. The total estimated dividend to be paid is N176,004,090 ( 2008:Nil)

16 INSURANCE FUNDS 2009 2008 N'000 N'000 Group

Company -Life 4,935,662 3,282,245 Company -General 759,220 755,956

------------ --------------5,694,882 4,038,201

======= ========

REPORT OF THE AUDITORSTO THE MEMBERS OF INSURANCE PLCAIICO

INDEPENDENT AUDITORS' REPORT TO THE MEMBERSOF AIICO INSURANCE PLC

We have audited the accompanying consolidated financial statements of Aiico Insurance Plc (“the Company”) and its subsidiary (“together referred to as the Group”), which comprise the consolidated balance sheets as at December 31, 2009, the consolidated profit and loss accounts and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Directors' Responsibility for the Financial StatementsThe Directors are responsible for the preparation and fair presentation of these financial statements. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors' ResponsibilityOur responsibility is to express an opinion on these Consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing, which require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the financial statements 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, proper books of accounts have been kept by the group and the financial statements which are in agreement therewith, give a true and fair view of the financial position of the group as at December 31, 2009, and of its financial performance and its cash flows for the year then ended in accordance with relevant statements of accounting standards issued by the Nigerian Accounting Standards Board, Insurance Act 2003 and Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004.

Lagos, Nigeria.

July 5, 2010

2009 Annual Report & Accounts26 2009 Annual Report & Accounts 51


14 TAXATION 2009 2008 N'000 N'000

Groupa Per profit and loss account Company income taxation 178,979 389,287 Education taxation 10,281 22,296 Capital gains taxation - 8,671

------------ -------------- 189,260 420,254 IT development Levy 1,162 - Deferred taxation (355,624) 527,818

------------ -------------- (165,202) 948,072 ======= ========b Per balance sheet At January 1, 669,690 323,895 Income taxation for the year 189,260 420,254 Taxation Paid (149,453) (74,459)

------------ -------------- At December 31, 709,497 669,690 ======= ========c. The charge for taxation has been computed in accordance with the provision of the Companies

Income Tax Act as amended to date.

2009 2008 N'000 N'000

14.1 Company - Lifea Per profit and loss account Company income taxation 62,473 92,291 Education taxation - - Capital gains taxation - 8,552

----------- --------- 62,473 100,843 IT development Levy - - Deferred taxation (327,645) 422,854

------------ -------------- (265,172) 523,697 ======= ========b Per balance sheet At January 1, 350,279 323,895 Income taxation for the year 62,473 100,843 Tax Paid (149,453) (74,459)

------------ ------------ At December 31, 263,299 350,279 ======= =======

50 2009 Annual Report & Accounts 2009 Annual Report & Accounts 27

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIESFOR THE YEAR ENDED DECEMBER 31, 2009

The following is a summary of the significant accounting policies adopted by the Group in the preparation of

these financial statements.

a) Basis of accounting

The financial statements are prepared under the historical cost convention modified by the revaluation of

land and buildings using the fund accounting basis.

b) Basis of consolidation

The group financial statements consolidate the financial statements of the Company and its subsidiary,

AIICO General Insurance Company Limited. Intra group balances and transactions and any unrealized

gains arising from intra group transactions are eliminated in preparing the Group's financial statements. In

the Company's books, investment in the subsidiary is stated at cost. Provision is made for any permanent

diminution in the value of the investment in the subsidiary.

c) Fixed Assets

Fixed assets are stated at cost or valuation less accumulated depreciation.

d) Depreciation

Depreciation of fixed assets is provided on a straight-line basis at such rates that will amortise cost over the

period of the estimated useful lives as follows:

%

Leasehold land and building 2 or over the unexpired period of the lease

Furniture, fixture and equipment 20

Motor vehicles 20

Assets - in- progress Not depreciated.

e) Debtors

Debtors are stated after deduction of specific provisions for debts considered doubtful of collection.

Specific provisions are made on non-performing accounts as follows:

91 - 180 days 25%

181- 270 days 50%

271- 360 days 75%

361 days and above 100%

f) Investments

Long -term investments

§ Quoted investments – These are stated at market value. Differences between the cost and the

market value are transferred to a quoted investment revaluation reserve account.

§ Unquoted investments – These are stated at cost less provisions for doubtful

investment.

§ Investment in subsidiary – Investment in the subsidiary is stated at cost


12.1 INTERCOMPANY

This represents amounts due to Aiico General Insurance Company Limited.

12.2 INTERCOMPANY

This represents amounts due from Aiico Insurance Plc.

13 OUTSTANDING CLAIMS 2009 2008 N '000 N '000 Group Company- Life 239,668 271,497 Company - General 699,316 252,595

------------ --------------938,984 524,092

======= ========

13.1 Company - Life Whole life & endowment 229,081 260,910 Group life 10,587 10,587

------------ -------------- 239,668 271,497 ======= ========13.2 Company - General Fire 66,092 6,665 Motor 199,065 81,162 Workmen Compensation 3,476 1,642 Marine 50,790 48,630 Personal accident 29,863 12,210 Casualty accident 286,456 79,323

------------ --------------635,742 229,632

Provision for IBNR 63,574 22,963------------ --------------

699,316 252,595 ======= ========


STATEMENT OF SIGNIFICANT ACCOUNTING POLICIESFOR THE YEAR ENDED DECEMBER 31, 2009 (continued)

Short -term Investments

Short-term investments are stated at the lower of cost or market value. The carrying amount is determined

on an item by item basis. The amount by which cost exceeds market value (unrealized loss) is charged to the

profit and loss account. Realized gains or losses on disposal of short term investments are taken to profit and

loss account. Interest receivable on investment is accrued and credited to profit and loss account.

g) Income from investments

Interest income is shown gross and is recognized on an accrual basis. Dividends are accounted for on the

basis of the amounts actually received during the year.

h) Deposit Administration funds

Funds received from customers under Deposit Administration Scheme are held strictly for investments and

are accounted for as liabilities in the financial records of the Company. Guaranteed interest payable thereon

is credited to the deposit accounts annually at rates agreed mutually with the respective customers.

i) Gross Premium

Gross Premium is recognized at the point of attachment of risk to a policy before deducting cost of

reinsurance cover. All written premium relating to risk for period not falling due within the accounting

period is carried forward as an unearned premium.

j) Net Premium

Net Premium represents total amount invoiced to policy holders less reinsurance and is recognized as

income from the date of attachment of risk.

k) Provisions for unexpired risks

Provisions for unexpired risks are based on time apportionment in accordance with the new Insurance Act

Section 20(1)(a) of 2003.

l) Claims incurred but not reported

Provisions are made for claims incurred but not reported to the Company at the balance sheet date in

accordance with Section 20(1)(b) of the Insurance Act, 2003 on the basis of 10% of net outstanding claims.

m) Contingency reserve

Contingency reserve is calculated, in the case of Non-Life business, at the rate of the higher of 3% of total

premium receivable during the year or 20% of net profits in accordance with Section 21(2) of Insurance Act,

2003 and, in respect of Life insurance business, at the rate of the higher of 1% of the gross premium and 10%

of net profits, in accordance with Sections 22(1)(b) of the Insurance Act, 2003.

n) Dividend

Dividend distribution to the Company's shareholders is recognized as a liability in the financial

statements in the year in which the dividend is approved by the shareholders as they do not meet the

criteria of present obligations of the Company.



10 DEFERRED TAXATION 2009 2008 N '000 N '000 Group Balance at January 1, 353,477 881,295 Provision for the year (Note 14) 355,624 (527,818)

----------- ------------ Balance at December 31, 709,101 353,477 ====== ======10.1 Company - Life Balance at January 1, 458,441 881,295 Provision for the year (Note 14.1) 327,645 (422,854)

----------- ----------- Balance at December 31, 786,086 458,441 ====== =======10.2 Company - General At January 1, (104,964) - Provision for the year (note 14.2) 27,979 (104,964)

----------- ----------- At December 31, (76,985) (104,964) ====== =======

11 CREDITORS AND ACCRUALS Group Due to reinsurers abroad 82,101 206,876 Due to policy holders 723,618 822,116 Sundry creditors and accruals 1,858,974 1,481,764 Bank overdraft 49,419 131,712 Finance Lease - 18,891

------------ -------------- 2,714,112 2,661,359 ======= ========11.1 Company - Life Due to policy holders 723,618 822,116 Sundry creditors and accruals 1,144,463 635,007 Bank overdraft 28,028 49,816 Finance Lease - -

------------ -------------1,896,109 1,506,939

======= ========11.2 Company - General Due to reinsurers abroad 82,101 206,876 Sundry creditors & accruals 714,511 846,757 Bank overdraft 21,391 81,896 Finance Lease - 18,891

------------ -------------- 818,003 1,154,420 ======= ========


STATEMENT OF SIGNIFICANT ACCOUNTING POLICIESFOR THE YEAR ENDED DECEMBER 31, 2009

o) Retirement benefit schemeThe Company operates a defined pension scheme with some Pension Fund Administrators namely; Aiico Pension Manager Limited, Crusader Pensions, Pension Alliance, Sigma, Trust Fund Pensions, Pensure and NLPC Pensions Limited. This is in compliance with the provision of the Pension Reform Act, 2004 whereby employer and employees contribute 7.5% each of the employees' annual basic salary, transport and housing allowance.

p) Deferred taxationDeferred income tax is provided using the liability method for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purpose. Current tax rates are used to determine deferred tax.

The principal temporary difference arises from depreciation of fixed assets.

q) Foreign currenciesTransactions in foreign currencies are recorded at the rates of exchange ruling at the respective dates of the transactions. Assets and liabilities in foreign currencies are translated to Naira at rates of exchange ruling at the balance sheet date. Profits or losses arising from the translation are included in the profit and loss account.

r) Management expensesExcept for the expenses directly related to the Company and its subsidiary, all other management expenses are shared between the Company and its subsidiary in the proportion of their contribution to the overall retained premium.

s) GoodwillGoodwill arising on consolidation represents the excess of the cost of acquisition over the net book value of the identifiable assets and liabilities of a merging entity at the date of acquisition.

In accordance with SAS 26 issued by the Nigerian Accounting Standards Board, Goodwill is tested for impairment annually, as well as when there are indications of impairment.

t) Underwriting resultsThe underwriting profit or loss on each class of insurance is determined after taking account of unearned premiums and outstanding claims.

u) Loan to policyholdersThe company grants cash loans to policyholders within their cash surrender value on request and automatic premium loans are also applied to policies within their cash surrender value if premium are not paid on due date.

v) Inter-company The company maintains a current account with the Subsidiary company and transactions are stated at cost.

w) Fixed Assets Revaluation SurplusFixed Assets Revaluation Surplus attributable to Life Insurance Business is apportioned between the Life fund and Shareholders' Fund at ratio of 70: 30 respectively.


8.2 Company - General Leasehold & Furniture & Motor Grand Total

Building Equipment Vehicle

COST N '000 N '000 N '000 N '000

At January 1, 2009 385,830 202,233 182,574 770,637

Additions 1,045 27,665 50,811 79,521

Revaluation 206,413 - - 206,413

Disposals - (337) (32,684) (33,021)

Transfer from Aiico Insurance Plc - 87,695 66,374 154,069

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

At December 31, 2009 593,288 317,256 267,075 1,177,619

======= ====== ====== ========

DEPRECIATION

At January 1, 2009 54,191 137,830 79,616 271,637

Charge for the year 8,224 33,409 31,419 73,052

Revaluation (58,058) - - (58,058)

Disposals - (127) (26,885) (27,012)

Transfer from Aiico Insurance Plc - 43,633 17,794 61,427

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

At December 31, 2009 4,357 214,745 101,944 321,046

======= ====== ====== ========

Net book value

At December 31, 2009 588,931 102,511 165,131 856,573

======= ====== ====== ========

At December 31, 2008 331,639 64,403 102,958 499,000

======= ====== ====== ========The Company's leasehold properties were professionally valued in November 2002, 2003 and 2006 by Adewale Fatokun & Co (Chartered surveyors and valuers) based on the open market value of the properties. The revaluation surpluses arising there from were taken to the revaluation reserve in 2002 2005 and 2009 respectively.The revaluation of Leasehold property is carried out at the discretion of the Directors and it is considered as and when necessary.

9 GOODWILL ON CONSOLIDATION Group Company -Life

2009 2008 2009 2008

N '000 N '000 N '000 N '000

1,166,609 1,166,609 1,166,609 1,166,609

======== ======= ======== ========

Goodwill was as a result of business combination done in 2006, the management is of the view that the value of the Companies as a result of the combination have not been impaired.



8.1 Company - Life Leasehold & Furniture & Motor Grand Total


N '000 N '000 N '000 N '000

Cost/Valuation

At January 1, 2009 1,359,656 700,638 192,912 2,253,206

Additions 6,300 53,379 114,666 174,345

Revaluation 805,523 - - 805,523

Disposals - (37,209) (70,023) (107,232)

Transfer to Aiico General - (87,695) (66,374) (154,069)

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

At December 31, 2009 2,171,479 629,113 171,181 2,971,773

======= ====== ====== ========

Depreciation

At January 1, 2009 177,258 527,094 108,694 813,046


Revaluation (204,780) - - (204,780)

Disposals - (30,354) (57,816) (88,170)

Transfer to Aiico General - (43,633) (17,794) (61,427)

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

At December 31, 2009 83 516,750 71,353 588,186

======= ====== ====== ========

Net book value

At December 31, 2009 2,171,396 112,363 99,828 2,383,587

======= ====== ====== ========

At December 31, 2008 1,182,398 173,544 84,218 1,440,160

======= ====== ====== ========

The Company's leasehold properties were professionally valued in November 2002, 2003 and 2006 by Adewale Fatokun & Co (Chartered surveyors and valuers) based on the open market value of the properties. The revaluation surpluses arising there from were taken to the revaluation reserve in 2002 2005 and 2009 respectively.

The revaluation of Leasehold property is carried out at the discretion of the Directors and it is considered as and when necessary.



Security...from our stable of experience over the years.



RC: 7340


GROUP BALANCE SHEETAS AT DECEMBER 31, 2009

Note 2009 2008

ASSETS N'000 N'000

Cash and Bank 1,827,516 1,263,561

Short-term Investments 2 11,210,179 10,110,204

Debtors and Prepayments 3 1,424,172 1,578,173

Prepaid reinsurance 4 105,858 105,620

Loans to Policy holders 852,553 714,607

Long-term Investments 5 3,791,089 3,000,501

Statutory Deposits 7 500,000 500,000

Fixed Assets 8 3,240,160 1,939,160

Goodwill on Consolidation 9 1,166,609 1,166,609

Deferred Taxation 10 709,101 353,477

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

TOTAL ASSETS 24,827,237 20,731,912

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

CURRENT LIABILITIES

Creditors and Accruals 11 2,714,112 2,661,359

Outstanding Claims 13 938,984 524,092

Taxation 14 709,497 669,690

Dividend 15 10,080 10,112

Insurance Funds 16 5,694,882 4,038,201

Deposit Admin and Pension Funds 17 1,878,798 1,387,814

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

11,946,353 9,291,268

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

TOTAL ASSETS LESS LIABILITIES 12,880,884 11,440,644

======== =========

CAPITAL & RESERVES

Called-up Share Capital 18 3,520,082 3,485,337

Bonus Issue Reserve 19 880,020 -

Contingency Reserve 20 948,958 717,571

Fixed Assets Revaluation Reserve 21 1,029,009 461,447

Quoted Investment Revaluation Reserve 22 467,830 639,817

General Reserve 23 270,479 (542,799)

Share Premium 24 5,764,506 6,679,271

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

Shareholders' funds 12,880,884 11,440,644

======== =========

------------------------------)

) Directors

------------------------------)

See notes to the financial statements.


2009 20087.1 Company - Life N'000 N'000 At January 1, 200,000 500,000 Transferred to Aiico General Insurance - (300,000) ----------- ------------- At December 31, 200,000 200,000

====== =======7.2 Company - General At January 1, 300,000 - Transferred from Aiico Insurance Plc - 300,000 ------------ --------------- At December 31, 300,000 300,000

======= =======This represents deposit with the Central Bank of Nigeria in accordance with Section 10 (3) of the Insurance Act 2003.

8. FIXED ASSETS Leasehold & Furniture & Motor Total


Group N'000 N '000 N '000 N '000

Cost/Valuation

At January 1, 2009 1,745,486 902,871 375,486 3,023,843

Additions 7,345 81,044 165,477 253,866

Revaluation 1,011,936 - - 1,011,936

Disposals - (37,546) (102,707) (140,253)

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

At December 31, 2009 2,764,767 946,369 438,256 4,149,392

======= ====== ====== ========

Depreciation

At January 1, 2009 231,449 664,924 188,310 1,084,683


Revaluation (262,838) - - (262,838)

Disposals - (30,481) (84,701) (115,182)

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

At December 31, 2009 4,440 731,495 173,297 909,232

======= ====== ====== ========

Net book value

At December 31, 2009 2,760,327 214,874 264,959 3,240,160

======= ====== ====== ========

At December 31, 2008 1,514,037 237,947 187,176 1,939,160

======= ====== ====== ========


COMPANY BALANCE SHEET-LIFEAS AT DECEMBER 31, 2009

Note 2009 2008ASSETS N'000 N '000

Cash and Bank 666,284 741,593Short-term Investments 2.1 8,112,908 8,803,912Debtors and Prepayments 3.1 850,142 676,959Loans to Policyholders 852,553 714,607Long-term Investments 5.1 3,061,483 2,110,746Investment in Subsidiary 6 4,000,000 4,000,000Statutory Deposits 7.1 200,000 200,000Fixed Assets 8.1 2,383,587 1,440,160Goodwill on Consolidation 9 1,166,609 1,166,609Deferred Taxation 10.1 786,086 458,441

-------------- ---------------TOTAL ASSETS 22,079,652 20,313,027

-------------- ---------------CURRENT LIABILITIES

Creditors and Accruals 11.1 1,896,109 1,506,939Intercompany 12.1 1,726,784 2,875,712Outstanding Claims 13.1 239,668 271,497Taxation 14.1 263,299 350,279Dividend 15 10,080 10,112Insurance Funds 16.1 4,935,662 3,282,245Deposit Admin and Pension Funds 17 1,878,798 1,387,814

-------------- ---------------10,950,400 9,684,598-------------- --------------

TOTAL ASSETS LESS LIABILITIES 11,129,252 10,628,429======== =========

CAPITAL & RESERVES

Called-up Share Capital 18 3,520,082 3,485,337Bonus Issue Reserve 19 880,020

-Contingency Reserve 20.1 557,516 508,554Fixed Assets Revaluation Reserve 21 764,538 461,447Quoted Investment Revaluation Reserve 22.1 414,695 448,310General Reserve 23.1 (772,105) (954,490)Share Premium 24 5,764,506 6,679,271

-------------- --------------Shareholders' funds 11,129,252 10,628,429

======== =========

------------------------------) ) Directors

------------------------------)See notes to the financial statements.

ii) Unquoted investments: 2009 2008N'000 N'000

Ordinary Shares 508,525 537,281 Preference Stock 1,264,398 542,446 Mortgage Loans 110,758 129,030 Lease or Guarantee Stock 253,623 4,930

------------- ----------- 2,137,304 1,213,687 Less: provision for diminution in value (22,564) (28,364)

------------- ------------ 2,114,740 1,185,323

------------- ------------- Total Investments 3,061,483 2,110,746

======== ======== 5.2 Company - General i) Quoted investments at market value

Ordinary shares: Cost 198,080 219,857 Unrealized gain 53,135 191,507

------------- --------------- Market value 251,215 411,364 ------------- ---------------ii) Unquoted investments Ordinary Shares 478,576 504,648 Preference Stock 99 99

---------- ---------- 478,675 504,747 Less: provision for diminution in value (284) (26,356)

--------- ---------- 478,391 478,391 ------------ --------------- Total Investments 729,606 889,755

====== ========6 INVESTMENT IN SUBSIDIARY Aiico General Insurance Company Limited (100%) 4,000,000 4,000,000

====== ======== 7 STATUTORY DEPOSIT

Group At December 31, 500,000 500,000

====== ========

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2009

3344 2009 Annual Report & Accounts 2009 Annual Report & Accounts

Note 2009 2008ASSETS N'000 N'000

Cash and Bank 1,161,232 521,968Short-term Investments 2.2 3,097,271 1,306,292Debtors and Prepayments 3.2 574,030 901,214Prepaid reinsurance 4.0 105,858 105,620Intercompany 12.2 1,726,784 2,875,712Long-term Investments 5.2 729,606 889,755Statutory Deposits 7.2 300,000 300,000Fixed Assets 8.2 856,573 499,000

-------------- ------------TOTAL ASSETS 8,551,354 7,399,561

-------------- -------------CURRENT LIABILITIES

Creditors and Accruals 11.2 818,003 1,154,420Outstanding Claims 13.2 699,316 252,595Taxation 14.2 446,198 319,411Insurance Funds 16.2 759,220 755,956Deferred taxation 10.2 76,985 104,964

-------------- --------------2,799,722 2,587,346

-------------- --------------TOTAL ASSETS LESS LIABILITIES 5,751632 4,812,215

======== ========CAPITAL & RESERVES

Called-up Share Capital 3,000,000 3,000,000Contingency Reserve 20.2 391,442 209,017Fixed assets revaluation reserve 21.2 264,471 -Quoted Investment Revaluation Reserve 22.2 53,135 191,507General Reserve 23.2 1,042,584 411,691Share Premium 1,000,000 1,000,000

-------------- --------------Shareholders' funds 5,751,632 4,812,215

======== ========

---------------------------------) ) Directors

---------------------------------)See notes to the financial statements.

COMPANY BALANCE SHEET-GENERALAS AT DECEMBER 31, 2009 (Continued)


4 PREPAID REINSURANCE 2009 2008 N'000 N'000

Fire 24,905 26,775Motor 21,138 22,879Workmen compensation 1,926 1,752Marine 27,419 20,130Personal accident 3,394 6,254Casualty accident 27,076 27,830

---------- ----------105,858 105,620====== =======

5 LONG-TERM INVESTMENTS

Group

i) Quoted investments at market value

Ordinary shares:

Cost 730,128 696,970 Unrealized gain 467,830 639,817

------------ ------------ Market value 1,197,958 1,336,787 ======= ========ii) Unquoted investments

Ordinary Shares 987,101 1,041,929 Preference Stock 1,264,497 542,446 Mortgage Loans 110,758 129,129 Lease or Guarantee Stock 253,623 4,930

------------ ------------ 2,615,979 1,718,434 Less: provision for diminution in value (22,848) (54,720)

------------ ------------- 2,593,131 1,663,714

------------ ------------- Total Investments 3,791,089 3,000,501

======= ========5.1 Company - Life

i) Quoted investments at market value

Ordinary shares: Cost 532,048 477,113 Unrealized gain 414,695 448,310

---------- ---------- Market value 946,743 925,423

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


2009 2008Note N'000 N'000

Gross premium written * 25 3,899,520 3,893,108Increase in unearned premium (3,264) (265,817)

-------------- --------------Gross premium earned 3,896,256 3,627,291 Reinsurance Cost 27 (283,735) (281,958)

-------------- --------------Net premium earned 3,612,521 3,345,333 Commission received 141,264 52,350

-------------- --------------Total income 3,753,785 3,397,683

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

Direct claims paid 963,144 691,251Increase in Claims reserves 28.2 446,721 140,729

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

Gross Claims incurred 1,409,865 831,980Reinsurance recovery (212,147) (99,806)

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

Net Claims incurred 1,197,718 732,174 Commission paid 638,304 528,966Acquisition costs 129,378 31,875 Maintenance costs 11,646 51,658

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

Total expenses 1,977,046 1,344,673-------------- --------------

Underwriting profit 1,776,739 2,053,010Investment and other Income 26 1,595,526 1,632,534Shareholders' share of valuation surplus 247,538 205,112Tax liability on Life fund 41,936 143,457Profit on Deposit Administration 25,217 -

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

Net operating income 3,686,956 4,034,113

Management expenses (1,758,747) (1,433,542) Provision for bad debts (588,771) (612,895)Provision for bad doubtful investments (459,975) (389,767)Loss on deposit administration - (25,078)

-------------- --------------Profit before Taxation 879,463 1,572,831

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

Gross premium written * - This relates to premium on non-life business only.


GROUP PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED DECEMBER 31, 2009

3 DEBTORS AND PREPAYMENTS 2009 2008 N'000 N'000 Group Outstanding premiums 751,908 891,434 Staff loans & advances 27,355 53,978 Interest receivable 120,032 145,797 Other debtors 458,929 405,994 Prepayments 65,948 80,970

------------- --------------- 1,424,172 1,578,173

======== =========3.1 Company -Life

Outstanding premiums 310,830 310,830 Staff loans & advances 4,272 10,259 Interest receivable 115,444 142,695 Other debtors 390,455 202,126 Prepayments 29,141 11,049

---------- ----------- 850,142 676,959

====== =======Outstanding premium for the Company represents Net Premium Due as at December 31, 2008. This was as advised by Hymans Robertson (HR) Limited (Actuary and Consultants) per their report of 14th May, 2009.

2009 20083.2 Company - General N'000 N'000

Outstanding premiums (note 3.2a) 441,078 580,604 Staff loans & advances 23,083 43,719 Interest receivable 4,588 3,102 Other debtors 68,474 203,868 Prepayments 36,807 69,921

---------- ------------ 574,030 901,214 ====== =======3.2a. Age analysis of outstanding premium

0 ------- 90 days 51,731 158,265 91 ------ 180 days 114,106 93,159 181 ---- 270 days 209,464 530,132 271 ---- 360 days 796,126 349,615 361 days and above 588,125 212,743 1,759,552 1,343,914 Less : Provision (1,318,474) (763,310)

------------- --------------- 441,078 580,604 ====== =======



NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2009

1. CORPORATE STRUCTURE & BUSINESS

AIICO Insurance Plc was established in 1963 by American Life Insurance Company and was incorporated in 1970. It was converted to a public liability Company in 1989 and quoted on the Nigerian Stock Exchange (NSE) in December 1990. The principal activity of the Company is the provision of insurance services to companies with operations in Life insurance business, deposit administration and Financial Services. Arising from the merger in the insurance industry, Aiico Insurance Plc acquired Nigerian French Insurance Plc and Lamda Insurance Company.

The Company has a subsidiary, Aiico General Insurance Company Limited in which it has 100% interest. The subsidiary provides Insurance services to companies with operations in General insurance business.

2 SHORT-TERM INVESTMENTS 2009 2008

N'000 N'000

Group

Term Deposits 10,913,346 9,440,349

CPs, BAs & Bonds 402,956 675,978

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

11,316,302 10,116,327

Less: provision (106,123) (6,123)

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

11,210,179 10,110,204

======== =========

2.1 Company -Life

Term Deposits 7,866,075 8,184,057

CPs, BAs & Bonds 352,956 625,978

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

8,219,031 8,810,035

Less: provision (106,123) (6,123)

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

8,112,908 8,803,912

======== =========


Term Deposits 3,047,271 1,256,292

Federal Government Bond 50,000 50,000

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

3,097,271 1,306,292

======== =========

2009 2008Note N'000 N'000

Profit before Taxation (brought forward) 29 879,463 1,572,831Taxation 14 165,202 (948,072)

------------ ------------Profit after Taxation 1,044,665 624,759

======= ========

Appropriation:

Contingency reserve 20 231,387 261,792General Reserve 23 813,278 362,967

------------ -----------1,044,665 624,759======= =======

Earnings per share 15 9

Adjusted Earnings per share 15 9


GROUP PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED DECEMBER 31, 2009 (Continued)


COMPANY PROFIT AND LOSS ACCOUNT-LIFEFOR THE YEAR ENDED DECEMBER 31, 2009

2009 2008Note N'000 N'000

Investment & other Income 26.1 859,608 1,144,458Shareholders' share of valuation surplus 247,538 205,112Tax liability on Life fund 41,936 143,457Surplus from Deposit Administration 25,217 -

------------- ---------------Net operating income 1,174,299 1,493,027

Management expenses (748,149) (576,506)Provision for doubtful investments (459,975) (363,695)Loss on deposit administration - (25,078)

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

(Loss)/Profit before Taxation 29 (33,825) 527,748Taxation 14.1 265,172 (523,697)

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

Profit after Taxation 231,347 4,051----------- ------------

Appropriation:

Contingency reserve 20.1 48,962 52,775General Reserve 23.1 182,385 (48,724)

======== ========Earnings per share 3 0.1



STATEMENT OF CASHFLOWFOR THE YEAR ENDED DECEMBER 31, 2009

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from public offer - 7,090,956 - 7,090,956

Public offer expenses - (501,023) - (501,023)

Dividend paid (32) (49) (32) (49) NET CASH (UTILISED)/ PROVIDED BY FINANCING ACTIVITIES (32) 6,589,884 (32) 6,589,884 NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (1,746,223) 8,932,814 (4,052,142) 7,186,450

CASH AND CASH EQUIVALENTS AT JAN. 1, 11,242,053 2,309,239 9,495,689 2,309,239

CASH AND CASH EQUIVALENTS AT DEC.31, 12,988,276 11,242,053 5,443,547 9,495,689

======== ========= ======== ========

Group Company- Life

2009 2008 2009 2008

Note N’000 N’000 N’000 N’000 CASH FLOWS FROM OPERATING ACTIVITIES

Premiums received from policy holders 8,799,198 7,474,253 4,899,678 3,581,145

Reinsurance receipts in respect of claims 231,660 230,152 19,513 130,346

Cash paid to and on behalf of employees (1,071,569) (712,628) (645,618) (497,536)

Reinsurance premium paid (597,355) (502,311) (313,392) (199,690)

Other operating cash payments (4,346,897) (4,291,837) (3,907,192) (371,454)

Claims paid (1,384,626) (1,015,202) (421,482) (323,951)

Company income tax paid (150,615) (74,459) (149,453) (74,459) NET CASH PROVIDED/(UTILISED) BY OPERATING ACTIVITIES 30 1,479,796 1,107,968 (517,936) 2,244,401

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of fixed assets (253,866) (707,232) (174,345) (155,173)

Purchase of liquid investments (1,102,674) (1,046,327) (1,102,452) (322,007)

Sale of liquid investments 139,996 567,712 92,473 567,712

Proceeds from sale of fixed assets 14,002 668,146 97,928 664,920

Investment income 1,469,001 1,752,663 859,839 1,296,713

Investment in subsidiary - - - (4,000,000)

Statutory deposit - - - 300,000 NET CASH (UTILISED)/ PROVIDED BY INVESTING ACTIVITIES (266,459) 1,234,962 (226,557) (1,647,835)


DEPOSIT ADMINISTRATION REVENUE ACCOUNTFOR THE YEAR ENDED DECEMBER 31, 2009

2009 2008N'000 N'000

Income

Investment income 106,237 6,603

Other income 590 2,698------------ ----------

Total income 106,827 9,301------------ ----------

Expenses

Guaranteed interest 62,746 1,776

Acquisition expenses 18,864 32,600

Maintenance costs - 3---------- ----------

Total expenses 81,610 34,379---------- ----------

Profit/(Loss) transferred to Life business 25,217 (25,078)====== ======

2009 2008

Note N'000 N'000

Premium 25 3,899,520 3,893,108

Increase in unexpired risks (3,264) (265,817)

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

Gross premium earned 3,896,256 3,627,291

Reinsurance cost 27 (283,735) (281,958)

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

Net premium earned 3,612,521 3,345,333

Commission received 141,264 52,350

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

Total income 3,753,785 3,397,683

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

Direct claims paid 963,144 691,251

Increase in outstanding claims 28.2 446,721 140,729

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

Gross claims incurred 1,409,865 831,980

Reinsurance recovery (212,147) (99,806)

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

Net claims incurred 1,197,718 732,174

Acquisition costs 767,682 560,841

Maintenance costs 11,646 51,658

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

Total expenses 1,977,046 1,344,673

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

Underwriting profit 1,776,739 2,053,010

Investments and other income 26.2 735,918 488,076

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

Net Operating Income 2,512,657 2,541,086

Management expenses (1,010,598) (857,036)

Provision for bad & doubtful debts (588,771) (612,895)

Provision for doubtful Investments - (26,072)

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

Profit before taxation 913,288 1,045,083

Taxation 14.2 (99,970) (424,375)

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

Profit after taxation 813,318 620,708

Appropriation:

Transfer to contingency reserve 20.2 (182,425) (209,017)

Transfer to general reserve 23.2 (630,893) (411,691)

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

(813,318) (620,708)

======= =======

Earnings per share (Kobo) 27 21


COMPANY PROFIT & LOSS ACCOUNT - GENERALFOR THE YEAR ENDED DECEMBER 31, 2009


REVENUE ACCOUNT-FOR THE YEAR ENDED DECEMBER 31, 2009

LIFE

2009 2008Note N'000 N'000

Gross premium written 4,899,678 3,581,145 Reinsurance Cost (313,382) (199,690)

--------------- ---------------Net premium earned 4,586,296 3,381,455 Commission received 55,074 20,487Investments & Other income 139,785 478,191

--------------- ---------------Total Income 4,781,155 3,880,133

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

Direct claims paid 421,482 323,951Surrenders 657,655 422,986Maturity 576,093 658,687(Decrease)/ Increase in Claims reserves 28.1 (31,829) 143,479

--------------- ---------------Gross Claims incurred 1,623,401 1,549,103 Reinsurance recovery (19,513) (130,346)

--------------- ---------------Net Claims incurred 1,603,888 1,418,757Commission paid 1,012,915 777,897 Acquisition expenses 173,507 121,428 Maintenance costs 74,545 35,368 Operating costs 680,621 503,209Shareholders' share of valuation surplus 247,538 205,112Tax liability on Life fund 41,936 143,457

--------------- ---------------Total Expenses 3,834,950 3,205,228

--------------- ---------------Increase to Life fund 946,205 674,905

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


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rc: 7340 aiico...76 2009 annual report & accounts lagos, nigeria for the year ended, december...

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