AMI Assurances unveils its 2020-2025 business plan

On Tuesday, September 28, 2021, the headquarters of AMI Assurances hosted a financial letter from the company on the occasion of its capital increase. La réunion s’est déroulée devant un parterre d’analystes financiers et journalistses de la place et présidée par Monsieur Habib BEN HADJ KOUIDER et animee par le Directeur Général de la compagnie, Monsieur des Administe de la administrence NAIur association.

AMI Assurances Chairman, Mr. Badr El-Din Al-Awali, spoke remotely to recall the key stages of the company’s transformation that has led it to return to profit in 2020 and calmly look to the future. He therefore thanked the employees and general agents of AMI Assurances, the company’s management and members of the Board of Directors for their strong mobilization and the tremendous work that has been done to popularize the new strategy.

Mr. Badr Al-Din Al-Awali also insisted on the importance of developing the bank guarantee between AMI Assurances and BNA for the two companies and on its contribution to the profitability of the two companies.

After recalling the company’s key dates, the General Manager presented the company’s achievements at the end of 2020, which were marked by a return to earnings thanks to a 28% decrease in claims fees. This decrease is mainly due to the work on improving portfolio quality that started in 2018.

The decrease in claims expenses in 2020 is also explained by motor branch expenses, in part due to the context of COVID-19 and its impact on travel restrictions. The result of the investments amounted to 13.1 million dinars in 2020 compared to 10.6 million dinars in 2019, a growth rate of 23%.

Despite the decrease in premiums, the fiscal year 2020 achieved a profit of 0.6 million dinars, compared to a deficit in 2019 of 29.9 million dinars. “This positive net result development is attributable to strong risk management discipline, operational rigor and optimization of investment returns.”explains Mr. Muhammad Iskandar Naga.

The main strategic axes of the AMI guarantee development plan

The company’s development plan is based on six main axes. The first is to reduce car claims and control their costs. It consists in improving the quality of the portfolio through a strict underwriting policy, establishing a scoring system based on quantitative and qualitative criteria for selecting the most profitable sectors, controlling through the development of out-of-court settlements and direct payment of repairs.

The second axis is the increase in average premiums in the automotive branch. It provides for upward revision of prices to converge with the market average, to ensure better profitability of the automotive branch and to determine price selectivity, as well as to propose additional insurance guarantees allowing for enrichment contracts and better coverage for customers.

The third axis is the development of Bancassurance by promoting and marketing insurance contracts through the banking network of the Afghan National Bank and launching an offer dedicated to the clients of the said bank, in addition to maximizing cooperation between AMI and BNA Assurances.

The fourth axis is the development of other non-living branches through the network of general agents and the network of intermediaries. To do this, the company intends to launch new package offerings in IRDS & Transport and health insurance for individuals, professionals and small businesses. AMI Assurances also plans to partner with brokers to better serve large and medium-sized companies for all of their insurance needs.

The fifth axis relates to controlling public expenses through renegotiation of service contracts, rationalization of operating places and controlled growth of various operating expenses. In the end, the sixth axis relates to improving investments through better investment management and an investment strategy based on foreign trade agreements, bond issuances and term deposits.

In order to enhance the company’s equity, improve organizational ratios and finance the transformation plan, the company’s board of directors implemented a recapitalization plan worth 185 million dinars distributed as follows:

  • Issuance of 35 million dinars of reserved securities for the National Bank of Bahrain and implemented at the end of 2018;
  • Establishment of reserves in the amount of 17.8 million dinars determined by the Extraordinary General Assembly on 06/05/2020 and implemented at the end of 2020;
  • Issuance of 40 million dinars of reserved securities of the Afghan National Bank by decision of the OGM on 05/06/2020 which should be implemented at the end of 2021;
  • Increasing the cash capital by 92.8 million dinars (including 46.4 million dinars from the issuance premium), which was determined by the extraordinary general assembly on 25/12/2020.

Action Plan 2020-2025

According to the company’s business plan 2020-2025, the management expects an average annual growth of 10% of the company’s sales volume, from 144.1 million dinars in 2020 to 235.5 million dinars in 2025.

This change will be accompanied by a significant decrease in the contribution of the automotive branch. Its weight in sales will drop from 91% in 2020 to 71% in 2025.

Thanks to the contribution of the capital increase of 93 million dinars and those participating in securities for 40 million dinars in 2021, the solvency margin must be in line with that required by the CGA (Comité Général des Assurances) as of fiscal year 2024 and the contribution of these operations It will make it possible to adhere to the minimum coverage rate for technical provisions from the 2022 fiscal year to stand at 102%.

As for the net result, it should witness an average annual growth of 113%, from 0.76 million dinars this year to 27.2 million dinars in 2025.

Characteristics of the capital increase process

The capital of AMI Assurances increased by 46.4 million dinars through cash subscription and the issuance of 46.4 million new shares at a price of 2 dinars, i.e. 1 dinars in nominal value and 1 dinars in emissions. Thus, the operation belongs to a total amount of 92.8 million dinars.

Subscription for new shares issued in cash is reserved, as a matter of priority, to former shareholders owning shares constituting the current capital and for assigns of subscription rights in the stock market, on an irreducible and dilutive basis at the rate of 77 new shares for 68 old shares from September 22 2021 until October 14, 2021.

After the subscription period that will be reserved for the previous shareholders to exercise their preferential subscription rights and in the event that the subscriptions do not reach the total capital increase, the new unsubscribed shares will be placed on publicly available from 18 to 22 October 2021.

Support and support of reference shareholders for the company’s transformation plan and increase its capital

Board members representing the reference shareholders (UGTT, BNA Group and HBG Holding) intervened during the financial call to confirm their support for the capital increase. In fact, recognizing the company’s potential and progress in implementing its strategic plan, they affirmed their support for this plan and their support for its realization.

Publication date: 09/29/21 10:23

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