33203 - AIICO

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Summary of Investment Information

Project Number

33203

Company Name

AIICO INSURANCE PLC

Date SPI Disclosed

Feb 7, 2014

Country

Nigeria

Region

Africa

Projected Board Date

Mar 10, 2014

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : May 29, 2014
Signed : Dec 23, 2014
Invested : Jun 30, 2015

Sector

Composite Insurance (Life and Non-life)

Project Description

AIICO is a leading insurance company in Nigeria with two principal business lines: life insurance and non-life insurance. The company also has three non-core business lines: asset management, health management and pensions. It commenced operations in Nigeria in 1963 as an agency office of American Life Insurance Company (“ALICO”), a subsidiary of American International Group (“AIG”). AIICO was then incorporated, registered and licensed in Nigeria in 1970 as a wholly owned subsidiary of AIG to offer life, pension products and insurance services. Although it was originally established as a life insurance business, the Company has since diversified into other financial services through its subsidiaries: Multi-shield HMO limited (92%), AIICO Capital Limited (100%), and AIICO Pension Managers Limited (58%).

The proposed investment consists of up to US$20 million in senior convertible loan to support the Company’s growth in Nigeria through the expansion of its agency and retail hubs, improvement of its technology platform, and new product development.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

Development Impact

1. Insurance Sector Development: IFC''s support for AIICO will enhance the growth and development of the Nigerian insurance sector, thus improving the sector''s contribution to the Nigerian economy.
2. Entrepreneurship and Employment: IFC''s involvement in the insurance sector through AIICO will promote growth of business activities and employment in Nigeria. AIICO plans to increase its agent count by more than 4000.
3. Social and Financial Stability: Support long-term savings and thereby reduce pressure on public social schemes.
4. Long-Term Funding Source: IFC''s support for AIICO will also facilitate the generation of long-term funds through the growth of insurance premiums, thereby buttress the country''s nascent capital markets.

1. Stamp of Approval: The investment will demonstrate IFC''s support for the ongoing reforms in the Nigerian insurance sector, as well as IFC''s contribution to the industry''s growth and capacity development. IFC is expected to bring credibility and comfort to stakeholders, including public stakeholders, regulators and customers through its investment.
2. Global Knowledge: The Company is at a critical juncture of its operation and requires a strategic investor to support its management. IFC''s additionality lies in not only bringing its own funding but also assisting AIICO with the selection of a strategic industry partner allowing the Company to benefit from IFC''s wide-ranging industry contacts with multinational players.
3. Sustainable Growth: AIICO plans to expand its retail business, reaching out to the underserved market. IFC will support the Company''s sustainable growth in the retail sector by advising the Company on social and environmental practices and best risk management practices.
4. Corporate Governance: Corporate governance structures are in place but there are still areas of improvement. In this context, IFC''s reputation and proper corporate governance will strengthen the Board of Directors adding to its independence, and overall functioning framework.

E&S Category Rationale / Risks and Mitigation

9843E868367E4898BFC5FC68DD7EF556 .par_324DD51A818F1B8585257AEF00400202_23 { font-family:sans-serif; color:black; font-size:10pt; font-weight:normal; text-decoration:none; } The project has been categorised as FI-2 according to IFC's Environmental and Social Review Procedures. AIICO is a general insurance company providing personal insurance and corporate/commercial insurance to clients in Nigeria. The overall portfolio risk is considered to be medium; the E&S risks and impacts are considered limited and can be readily addressed through mitigation measures. The applicable requirements are the Exclusion List, the applicable environmental and social laws in Nigeria and the Performance Standards.

AC35BFC61B794CDB98E5093670B42911 .par_324DD51A818F1B8585257AEF00400202_24 { font-family:sans-serif; color:black; font-size:10pt; font-weight:normal; text-decoration:none; } The main E&S risks and impacts of this project relate to the ability of AIICO to identity and manage the environmental and social risks and impacts associated with its insurance activities particularly for corporate entities. Although AIICO currently has no E&S Management System, the company reviews E&S aspects of projects (industrial facilities) during the assessment stage. The company identifies risk areas and recommends corrective measures; clients are also required to provide HSE policies. AIICO will be required to set-up a formal E&S Management System to ensure a consistent approach to identifying E&S risks.

Task Title & Description	Actual Due Date	Status	Comments	Completion Date
Nominate officers		Completed
Establish SEMS		Completed
Formalize procedures		Completed
Develop guidelines		Completed
Staff Training		Completed

Contacts

For Inquiries About the Project, Contact

AIICO Insurance PLC
Mr. Edwin Igbiti
Managing Director & CEO
AIICO Plaza
PC 12 Churchgate Street
Victoria Island, Lagos
Telephone: +234-1-279-9598

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