A D A P T. T R A N S F O R M . G R O W.

ANNUAL REPORT & ACCOUNTS 2019

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Adapt. Transform. Grow.

Today’s technologies demand constant adaptations
…transforming and growing businesses
Self-inflating tyres expand driving options
…suiting all road-types, weather and blowouts

We operate ahead of emerging client-conditions

Consistent with updated strategies and processes
We adapt, transform and grow
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Quick rundown

05
Overview
16
Business insight
Our vision, Know Us in "This is Our year-on-year achievements
Leadway" and a key notification brought to the fore under this
in this section. section.

THE FULL CONTENTS

OVERVIEW BUSINESS INSIGHT GOVERNANCE

06 | Vision, Mission 19 |Corporate Information 22 | Board of Directors

07 | Know Us in “This is Leadway” 26 | Corporate Governance
13 | Core Values Report
15 | Notice of Annual General 38| Complaint and Feedback
Meeting Statement
40 | Independent Auditor's
Report
44 | Company Information and
Summary of Significant
Accounting Policies
ANNUAL REPORT
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CONTENTS

21
Governance
66
Financial
156
Appendices
Get to know our Directors, Statements (Other National
Management and control Disclosures)
mechanisms in this section. Our Financial Statements,
presented in numbers, More about our composite
quantities and estimates in company in this section.
this section.

FINANCIAL STATEMENTS APPENDICES (OTHER

NATIONAL DISCLOSURES)

67 | Company Statement of 157 |Value Added Statement

Financial Position 158 | Five Year Financial Summary
68 | Company Statement of 160 | General Insurance Business
Comprehensive Income Statement of Financial
69 | Company Statement of Position
Changes in Equity 161 | General Insurance Business
71 | Company Statement of Income Statement
Cash Flows 162 | General Insurance Business
72 | Notes to the Financial Revenue Account
Statements 163 | Financial Performance
164 | Life Business Statement of
Financial Position
165 | Life Business Income
Statement
166 | Life Business Revenue
Accounts
167 | Revenue Account on Deposit
Administration
168 | Financial Performance
169 | Life Business Annuity
Statement
170 | Leadway at a Glance
171 | Branch Network
172 | Subsidiary
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Insurers must embrace

technology to rapidly
deepen insurance
penetration. -CIIN Journal July, 2018

Mr. Oye Hassan-Odukale, mfr.

MD/CEO Retired
ANNUAL REPORT
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Overview
06 | Vision, Mission
07 | Know Us in “This is Leadway”
13 | Core Values
15 | Notice of Annual General Meeting
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VISION
To be a leading insurance company and
non banking financial solutions provider
in Nigeria, leveraging on our strategic
capabilities in other selected markets.

MISSI N
To be a service provider of choice, bringing
insurance as a risk management tool to the
consciousness of all; adding value to our
clients and other stakeholders in an efficient
and reliable manner.
ANNUAL REPORT
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This is LEADWAY
CLAIMS

LEADWAY
20+
Retail Insurance
N 38.5 billion
Paid in claims in
GUARANTEE
Insuring your happiness,
products that add 2019. no matter what happens
value to you. in your business and life.

313
Leadway Employees
24 Branches spread
on hand to serve you. across the country to
meet your insurance
needs.
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This is LEADWAY
Know Us
Established since 1970, LEADWAY is one of Nigeria’s
foremost insurance companies with the reputation for
efficient service delivery. For nearly 5-decades we stayed
honorable to our Life and General Insurance underwriting
commitments and have earned the reputation for
excellence in claims-handling.

Our steady growth in premium income and combined

assets currently stands at over N90b and N396b,
respectively.

Our investment portfolio is one of the largest in the

Nigerian Insurance Industry, with a total investment
portfolio valued at over N328b. In the past year, we
maintained Claims expense of N38.5b. We are money-
market active, with over N21.5b deposited in A+ rated
banks and other financial institutions. Our fixed income
instrument stands at over N277b, consisting mainly of
Federal and State Government Bonds.

Our Board of Directors consists of eminent Nigerians and

seasoned business persons of proven personal integrity.

We are also firmly grounded by the foundation of integrity

laid and instilled by our founder, of blessed memory, Sir
(Dr.) Hassan O. Odukale (kjw, FCII).
ANNUAL REPORT
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Our Commitments
We honor the pledge to always meet our financial
obligations to all customers through rain or shine.
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Our Commitments Continued

We offer fully integrated services covering the full
spectrum of insurance products and allied financial
services, some of which include Fire & Allied perils,
Property/ All Risk, Personal Accident, Contingent
Employee/ Liability, Householder's Comprehensive,
General Liability, Marine Cargo & Hull, Engineering,
Electronic Equipment, Goods in Transit, Motor, Aviation,
Oil & Gas Power, Lifestyle + SME, Agriculture Insurance.
Others are Life & Annuity Contracts, Individual Deposit
Administration, Personal Savings Plan, Personal Annuity
Plan, Mortgage Protection, Life Annuity Contracts, Bonds,
Secured Credit, Miscellaneous Financial Loss, Managed
Funds and Trusteeship.
ANNUAL REPORT
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Keynotes

N396b
Total Asset base
N91b N54b
Premium Income Shareholders’
Funds
12 ANNUAL REPORT
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Keynotes Continued
We maintain:

Ÿ Allied Financial Services like bonds, secured credit,

miscellaneous financial losses and funds portfolio
management

Ÿ Re insurance back up from Swiss Re, Africa Re,

General Insurance of India, AIG of Europe, CHUBB,
Ace Global, WAICA, Continental Re and various
syndicates at Lloyds

Ÿ Highly computerized operations that enhance

efficiency

Ÿ Clientele of government establishments, Ministries

and Parastatals

Ÿ International non-affiliate network arrangement

with key insurers across the globe – CHUBB, QBE,
Swiss Re, Alianz, XL, HDI

Ÿ Data and analytics, our Management makes data-led

decisions for the benefit of customers

Ÿ No loan stock and internally generate funds for

capital projects backed by a carefully planned
investment portfolio
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Core Values
Our core values impact who we are,
what we do and how we operate.
M o s t i m p o r t a n t l y h o w eve r, i t
impacts how we support our
customers. Nothing counts more in
our thoughts than our customers.
That’s why our core values are the
foundation on which everything we
do is built.

iSCORE
I: Integrity
S: Service
C: Customer Focus
O: Openness
R: Respect for the Individual
E: Excellence

Acting with honesty and Serving our customers in timely, Seeking to determine the needs
honor towards all our responsive, pro-active manner of our customers and taking
stakeholders without and meeting their needs and action to satisfy them.
compromising the truth. aiming to delight.

Sharing information with our Treating every customer with Confidently pursuing highest
customers, listening to them, utmost dignity and according service quality and giving the
receiving constructive feedback them all the attention and care best to our customers that
and confronting ethical problems due to them. warrants our persistent
immediately. commitment.
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ANNUAL REPORT
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Notice of the
48th Annual
General Meeting
Notice is hereby given that the 48th Annual General Meeting of LEADWAY ASSURANCE COMPANY
LIMITED will convene virtually at the First Floor Meeting Room, Leadway House, 121/123, Funsho
Williams Avenue, Iponri, Surulere, Lagos on Friday 29th May, 2020 at 11am to transact the following
businesses:

Special Business
1. “That in accordance with Section 217(2) of the Companies and Allied Matters Act 1990, shareholders
agree to hold the Annual General Meeting called notwithstanding that less than 21 days’ notice of
meeting has been given.”

Ordinary Business
2. To adopt the reports of the Directors and Auditors, including the statement of accounts for the year
ended 31st December 2019.
3. To declare a dividend.
4. To elect/re-elect Directors.
5. To authorize the Directors to fix the Auditor’s remuneration.

BY ORDER OF THE BOARD

Olumide Hanson
COMPANY SECRETARY
FRC/2019/NBA/00000019064
121/123, Funso Williams Avenue,
Iponri, Surulere,
Lagos.

NOTES:

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to
attend and vote instead of him/her. In view of the Covid-19 pandemic, attendance shall be virtual and
also by proxy. Designated proxies listed in the proxy form attached to the Annual Report are Mr. Tunde
Hassan-Odukale (Managing Director/Chief Executive Officer) and Mr. Olumide Hanson (Company
Secretary). To be valid, executed forms of proxy should be deposited at the Office of the Company
Secretary, Leadway Assurance Company Limited, 121/123 Funsho Williams Avenue, Surulere, Lagos,
not later than 48 hours before the time of holding the meeting or sent via email to c-
secretariat@leadway.com

2. The Register of Members and their shareholding is available for inspection, at the office of the
Company Secretary during normal business hours, from the date of this notice until the close of
business on Tuesday May 26, 2020.

Mr. Olumide Hanson

COMPANY SECRETARY
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Business Insight
19 | Corporate Information
ANNUAL REPORT
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Yo u r c o m p a n y l e a p e d
f o r w a r d t o p r e s e r ve i t s
leadership position in the
insurance industry in the year
2019, despite the negative
macro-economic condition in
Nigeria...

Gen. (rtd) Martin Luther Agwai, cfr

CHAIRMAN
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Corporate Information

Certificate of
Incorporation Number Date of Incorporation NAICOM License Number
RC 7588 22 September, 1970 RIC-025

Corporate Head Office

Registered Office 121/123 Funso Williams Avenue,
NN 28/29 Constitution road, Iponri Surulere, Lagos Email: Website:
Kaduna State Nigeria Tel: 01-2700700 insure@leadway.com www.leadway.com

DIRECTORS
Gen. (rtd) Martin Luther Agwai, cfr Chairman
Mr. Oye Hassan-Odukale, mfr Managing Director
(Retired wef 31st December, 2019)
Mr. Tunde Hassan-Odukale Managing Director
(Appointed wef 1st January, 2020)
Ms. Adetola Adegbayi Executive Director
Mr. Jeremy Rowse Non-Executive Director
Mrs. Mowunmi Sotubo Non-Executive Director
(Resigned wef 1st April, 2019)
Mr. Eugene Curley Non-Executive Director
(Resigned wef 8th August, 2019)
Mr. Seyi Bickersteth Non-Executive Director, Independent
Mr. Odein Ajumogobia Non-Executive Director, Independent
Mr. Martyn Parker Non-Executive Director
(Appointed wef 3rd February, 2020)
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MANAGEMENT STAFF
Mr. Oye Hassan-Odukale, mfr Managing Director/CEO - Retired 31 December, 2019
Mr. Tunde Hassan-Odukale Managing Director/CEO - Appointed 1 January, 2020
Ms. Adetola Adegbayi Executive Director, General Insurance
Mr. Tinashe Muyambo Head, Life Business
Mr. Gboyega Lesi Commercial Director
Mr. Allan Olufade Suradj Regional Director
Mrs. Kunbi Adeoti Human Resources Director
Mr. Odalo Aimufia Chief Information Officer
Mr. Ernest Aziagba General Insurance Actuary
Mr. Tunde Alao-Olaifa Strategy & Special Projects Director
Mr. Oluwafemi Adebayo Life Sales Director
Mr. Bamidele Lawal Chief Technical Officer
Mrs. Kikelomo Fischer Enterprise Risk Management Director
Mr. Olumide Hanson Company Secretary

Bankers and other Professional Advisors

Company Secretary Auditors Actuaries
Olumide Hanson KPMG Professional Services Ernst & Young Nigeria
FRC/2019/NBA/00000019064 KPMG Towers FRC/2012/NAS/00000000738
Bishop Aboyade Cole Street
Victoria Island, Lagos Estate Surveyor and Valuer
Tel: (01) 2718955 Diya Fatimilehin & Co.
FRC/2013/NIESV/00000002773

Bankers Reinsurers
Access Bank Plc African Reinsurance Corporation
Citibank Nigeria Limited Continental Reinsurance Plc
FBN Bank (UK) Limited Waica Reinsurance
Fidelity Bank Plc Hannover Reinsurance Company Limited
First Bank of Nigeria Limited General Insurance Company, India
First City Monument Bank Limited Swiss Reinsurance Africa Limited
FSDH Merchant Bank Nigeria Limited AIG Europe
Guaranty Trust Bank Plc Kiln Syndicate
Keystone Bank Nigeria Limited Chubb Limited
Polaris Bank Plc
Stanbic IBTC Bank Plc
Standard Chartered Bank Nigeria Limited
Sterling Bank Plc
Union Bank Plc
United Bank of Africa Plc
Wema Bank Plc
Zenith Bank Plc
ANNUAL REPORT
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Governance
22 | Board of Directors
26 | Corporate Governance
Report
38| Complaint and Feedback
Statement
40 | Independent Auditor's
Report
44 | Company Information and
Summary of Significant
Accounting Policies
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Board of Directors
Ÿ Visiting Professor, African Leadership
Center, London
Ÿ Former Chief of Army Staff, Nigerian
Army
Ÿ Former Chief of Defense Staff, Nigerian
Army
Ÿ Former Chairman, Subsidy
Reinvestment Programme
Ÿ Alumnus, National Defense University,
Washington DC, USA
Ÿ Alumnus, Administrative Staff College of
Nigeria

Gen. (rtd) Martin Luther Agwai, cfr.

CHAIRMAN

Ÿ Chairman, FBN UK
Ÿ Member, Executive Committee of the African
Insurance Organization
Ÿ Past Chairman, Nigerian Insurers Association
Ÿ Former Member, Federal Government of Nigeria’s
Committee for the Review of Insurance Laws
Ÿ Munich Re Fellow
Ÿ Alumnus, University of Houston, Texas, USA
Ÿ Alumnus, Harvard Business School, USA

Mr. Oye Hassan-Odukale, mfr.

CHIEF EXECUTIVE OFFICER
Retired 31 December, 2019

Ÿ Director, First Bank of Nigeria Ltd.

Ÿ Member, Royal Society of Mathematics
and the Institute of Actuaries
Ÿ Former Director, Stanbic IBTC Bank Plc
Ÿ Former Director, Union Assurance
Ÿ Alumnus, University of London
Ÿ Alumnus, City University, London
Ÿ Alumnus, Harvard Business School, USA

Mr. Tunde Hassan-Odukale

MANAGING DIRECTOR/CEO
Appointed January 1, 2020
ANNUAL REPORT
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Board of Directors Continued

Ÿ Former Director, Santam South Africa

Ÿ Former Chief Executive, African Life
Assurance, Johannesburg, South Africa
Ÿ Former Member, Board of the Life Offices
Association of South Africa
Ÿ Former Member, Ghana Investment Advisory
Council
Ÿ Alumnus, Rhodes University, South Africa
Ÿ Alumnus, University of Cape Town, South
Africa

Mr. Jeremy Rowse

NON-EXECUTIVE DIRECTOR

Ÿ Member of Nigerian Bar Association

Ÿ Fellow, Chartered Institute of Arbitrators
(FCI) Arb London.
Ÿ Former Attorney General and Commissioner
of Justice, Rivers State
Ÿ Former Minister of State for Petroleum
Resources
Ÿ Former Minister of Foreign Affairs
Ÿ Alumnus, Harvard Law School,
Massachusetts.

Mr. Odein Ajumogobia SAN.

NON-EXECUTIVE DIRECTOR

Ÿ Chairman, Andersen Tax Africa

Ÿ Director, Nigeria-South Africa
Chamber of Commerce
Ÿ Director, Nigerian Economic Summit
Group
Ÿ Fellow, Institute of Chartered
Accountants of Nigeria (FCA)
Ÿ Former National Senior Partner,
KPMG Nigeria
Ÿ Former Chairman, KPMG Africa
Ÿ Alumnus, York University, Canada.

Mr. Oluseyi Bickersteth

NON-EXECUTIVE DIRECTOR
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Board of Directors Continued

Ÿ Chairman of Swiss Re Life & Health Africa

Ÿ Former Deputy Chairman of Vina Re in Vietnam
Ÿ Former Executive Director of Swiss Re Life and
Health Australia
Ÿ Former Executive Director Swiss Re Asset
Management Hong Kong
Ÿ Former Chief Executive Officer of Swiss Re Life
and Health UK
Ÿ Fellow, Chartered Insurance Institute
Ÿ Fellow, of London Chartered Insurance Institute

Mr. Martyn Parker

NON-EXECUTIVE DIRECTOR

Ÿ Director, Leadway Hotels Limited

Ÿ Director, Energy and Allied Insurance
Pool of Nigeria
Ÿ Director, Nigeria Liability Insurance Pool
Ÿ Associate, Chartered Insurance Institute,
London
Ÿ Associate, Chartered Institute of
Arbitrators, UK.
Ÿ Former Director, Prestige Assurance Plc.
Ÿ Alumnus, University of Bristol, UK.
Ÿ Alumnus, University of South Wales, UK.
Ÿ Alumnus, Harvard Business School, USA

Ms. Adetola Adegbayi

EXECUTIVE DIRECTOR

Ÿ Member, Chartered Institute of Arbitrators,

United Kingdom
Ÿ Member, Nigerian Bar Association
Ÿ Alumnus, University of Lagos
Ÿ Fellow, Institute of Chartered Secretaries
and Administrators, UK.

Mr. Olumide Hanson

COMPANY SECRETARY
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NAICOM/CA/ADV/2013/1183
25
26 ANNUAL REPORT
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Corporate Governance Report

for the year ended 31 December 2019

Introduction

Leadway Assurance Company Limited is committed to adhering with high standards of good corporate
governance at all levels of its operations. The Board of Directors has continued to ensure the implementation of
corporate governance principles that guarantee fairness, accountability and transparency in all its dealing within
and outside the Company and its subsidiaries. Leadway complies with all laws, regulations, rules and guidelines,
applicable to insurance business, including the Code of Business Ethics and the Nigeria Code of Corporate
Governance issued by the Financial Reporting Council (FRC).

COMPOSITION OF DIRECTORS

The Board of Leadway comprises a total of seven directors as at 31 December 2019. This includes the Chairman,
(who is an Independent Non-Executive Director), the Managing Director, two Executive Directors and one Non-
Executive Director and two Independent Non-Executive Directors. The members of the Board are reliable, skilled
and bring to the Board decades of experience and expertise which positively impacts the oversight responsibility
of the Board. Their level of expertise has manifested in the strategic direction of the company and high quality of
management policies formulated over the years.

SEPARATION OF THE ROLE OF THE CHAIRMAN FROM THE MANAGING DIRECTOR

The way and manner the company structured the roles of the Chairman and the Managing Director has assisted in
averting overlaps of roles. The Chairman who is first among equals is responsible for the overall leadership of the
Board and for creating enabling environment for the effectiveness of individual directors, while the Managing
Director is responsible for the day-to-day running of the company to achieve overall efficiency of management
controls. This is done in accordance with the Nigerian Code of Good Corporate Governance 2018.

GENDER DIVERSITY

Leadway Assurance understands that gender diversity is fundamental to the success and sustainability of the
company and enriches discussions among directors, better reflects the company’s relationship with all of its
stakeholders and allows for improved stewardship from a risk-management perspective. The company has its
diversity policy and has committed to establish measurable objectives for achieving diversity on the Board and
within management positions. The Company plans to achieve a 30% gender diversity over the next few years and
strives to create a diverse and inclusive culture by deliberately promoting increased women representation on
the Board, management positions and overall employees, based on availability of vacancy and appropriately-
skilled candidates. The company is committed to improve other dimensions on diversity to reflect global best
standard and will reflect its efforts in future disclosures.
ANNUAL REPORT
& ACCOUNTS 2019 27
Corporate Governance Report Continued
for the year ended 31 December 2019

PROCESS OF BOARD APPOINTMENT

The process for the selection, nomination and appointment of a candidate to the Board is essential to ensure the
Company has an optimum combination of experience and commitment and achieve the effectiveness of the
Board.
Potential candidates are identified by referrals of suitably qualified individuals by other Directors; and/or
engaging external consultants that will present diverse candidates from the pool of candidates sourced.
The Nomination, Remuneration and Governance Board Committee is saddled with the responsibility of engaging,
interview and recommending the suitable candidates, having regard to the expertise, integrity, qualification, age,
experience, positive attributes, independence, competency, relationships, industry standing, diversity of gender,
background, professional skills and personal qualities required to operate successfully as director. The
Committee is further guided by the Succession and Diversity policies in its engagement.

Board Training and Induction

The Chairman, in conjunction with the Company Secretary, is responsible for ensuring that induction
programmes are conducted for new Directors and a continuing education programme is in place for all Directors.
The Continuing education is expected to assist directors to consistently familiarize themselves with their roles
and responsibilities, Corporate Governance, the Company’s strategic plan, operations, and the business
environment within which the company operates.

New directors undergo a three-day orientation and Induction programme which holds within three months of the
director’s appointment and entail an engagement with the Management of the company coordinated by the
Company Secretary. The various sessions provides directors with understanding of the company’s business,
current strategy/business plan, Organization Structure, delegation of authority, Board and Board Committees’
annual plan, Corporate Governance and Risk Management information, the company’s Board approved policies
and Code of Conduct. The session also provides an insight into the Financial and Capital Management of the
company.

Directors are encouraged to attend internal and external seminars and workshops that are organized on the
financial standards, new development within Corporate Governance and Mandatory trainings organized by the
regulator, in order to enhance their skills and knowledge.

During the year, the directors of the company attended the following trainings/ seminars to enhance their
knowledge in the discharge of their duties within the company.
- Board IFRS 9 & 17 Awareness Training organized by Ernst & Young.
- Insurance Directors Conference 2019 organized by National Insurance Commission and College of Insurance
on Corporate Governance.

BOARD EVALUATION

The assessment of the effectiveness of the Board is key in the Board Governance Structure. The Board undergoes
a rigorous evaluation process every year to assess the performance of the Board, its committees, individual
directors and assessment of the Corporate Governance Practices. This exercise has been previously carried out
by an independent external consultant with outcomes reported to the Board and the sectoral regulator.
28 ANNUAL REPORT
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Corporate Governance Report Continued

for the year ended 31 December 2019

In 2017 and 2018, the Society for Corporate Governance and Ernst & Young respectively, carried out the
evaluation of the Board, its committees, the Chairman, individual Directors, and the Company’s corporate
governance practices.

The external evaluation that was conducted for the year 2018 was with reference to the National Insurance
Commission Code of Corporate Governance 2009, best practice and readiness test against the principles in the
Nigerian Code of Corporate Governance 2018 released by the Financial Reporting Council. This exercise
consists of a one-one interview with directors and completion of Board effectiveness questionnaires.

In view of the requirement by the Nigerian Code of Corporate Governance 2018 which provides for Board
Evaluation to be facilitated once every three years by an Independent External Consultant and having
successfully carried out the evaluation of the last two years by Independent External Consultants, the evaluation
for the year 2019 is being conducted internally by the Company’s Secretariat. The internally-driven Board
Evaluation for the year 2019 is to provide an opportunity for the Board to frankly resolve the identified gaps that
undermines the effectiveness of the Board. The feedback from the Board effectiveness review process will be
discussed with the Board with identified action plan for resolution and the report will be submitted to the
company’s regulator.

DIRECTORS STANDING FOR RE-ELECTION

In compliance with the Companies and Allied Matters Act Laws of the Federation of Nigeria 2004, one-third of the
company’s directors are required to retire by rotation at the Annual General Meeting (AGM). This is applicable to
directors who have been longest in office since their last election.
Consequently, Mr. Jeremy Rowse and the Chairman, Gen. Martin Luther Agwai are up for retirement and are both
eligible for re-election. They have both offered themselves for re-election.

The Nomination, Remuneration and Governance Committee has the responsibility to review and assess the
performance of the Directors that are subject to re-election at the AGM and submits its recommendation to the
Board for the proposed re-election being presented to the Shareholders for approval. The Committee makes its
recommendation, taking into consideration, value contribution at Board and Board Committee meetings,
deliverables on the expectations in relation to his role and responsibilities and continuing value to the Board
through in-depth reasoning, knowledge, experience and expertise.
ANNUAL REPORT
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Corporate Governance Report Continued
for the year ended 31 December 2019

BOARD RESPONSIBILITY

The Board is saddled with the responsibility of making policies for the company, reviewing corporate performance,
monitoring strategic decisions while ensuring regulatory compliance, safeguarding shareholders' interest and fulfilling
the expectations of stakeholders. The Board met five times in the last financial year and through their leadership, the
company was able to achieve its set objectives. The record of the attendance is provided below:

Meetings Held 1 2 3 4 5

17th 14th
Names 21st March, 23rd May, 8th August, October, November,
2019 2019 2019 2019 2019
Gen. (rtd) Martin Luther Agwai
(Chairman, Independent) √ √ √ √ √
Mr. Oye Hassan-Odukale (Managing Director) √ √ √ √ √
Mr. Tunde Hassan-Odukale (Executive Director) √ √ √ √ √
Ms. Adetola Adegbayi (Executive Director) √ √ √ √ √
Mr. Jeremy Rowse (Non-Executive) √ √ √ √ √
Mr. Eugene Curley (Non-Executive) √ √ √ NLD NLD

Mrs. Mowunmi Sotubo (Non-Executive) √ NLD NLD NLD NLD

Mr. Martyn Parker (Non-Executive) NYA NYA NYA NYA NYA

Mr. Odein Ajumogobia (Non-Executive, Independent) √ √ √ √ √

Mr. Seyi Bickersteth (Non-Executive, Independent) √ √ √ √
Key:
√ Present *A p o l o g y N L D - N o L o n g e r a D i r e c t o r N Y A - N o t Ye t A p p o i n t e d

Committees of the board

The Board committees have been engineered to ensure proper coordination and effectiveness and these
committees are saddled with responsibilities which are aimed at enhancing the operations of the company.
Over the years, the committees have rendered immense assistance to the Board through regular reporting.
Below are the committees of the Board:
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Corporate Governance Report Continued

for the year ended 31 December 2019

a. Enterprise Risk Management and Technical Committee:

The Committee comprises three Non-Executive Directors and two Executive Directors. Mr. Jeremy Rowse
Chairs the Committee and other members are Mr. Seyi Bickersteth (Independent), Mr. Odein Ajumogobia
(Independent), Mr. Tunde Hassan-Odukale (Now Managing Director) and Ms. Adetola Adegbayi (Executive
Director).

This committee assists the Board in carrying out its oversight responsibilities by:
* Coordinating and overseeing the application and effectiveness of technical controls and analysis in the
insurance activities;
* Enhancing the quality, effectiveness and relevance of insurance technical reports and management information;
* Overseeing the strategic risk management process and monitoring the quality, integrity, reliability and
effectiveness of the process;
* Reviewing the adequacy and effectiveness of controls on the development, introduction and maintenance of IT
systems and processes.

The committee held four meetings in the year 2019 and the attendance of directors stated below:

Meetings Held 1 2 3 4

19th March, 21st May, 6th August, 12th

Names 2019 2019 2019 November,
2019

Mr. Jeremy Rowse (Chairman) √ √ √ √

Mr. Odein Ajumogobia (Non-Executive, Independent) √ √ √ √
Mr. Seyi Bickersteth (Non-Executive, Independent)
√ √ √ √
Mr. Tunde Hassan-Odukale (Now Managing Director)
√ √ √ √
Ms. Adetola Adegbayi (Executive Director)
√ √ √ √
Key:
√ Present
ANNUAL REPORT
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Corporate Governance Report Continued
for the year ended 31 December 2019

b. Audit & Compliance Committee

The Committee comprises three Non-Executive Directors and one Executive Director. Mr. Seyi Bickersteth
(Independent) Chairs the Committee and other members are Mr. Eugene Curley (Non-Executive Director, now
resigned), Mrs. Mowunmi Sotubo (Non-Executive Director, now resigned) and Mr. Tunde Hassan-Odukale (Now
Managing Director).

This committee assist the Board in carrying out its oversight responsibilities by:
* Monitoring the Nigerian regulatory environment for threats and/or opportunities
* Reviewing the Company’s relationship with relevant regulatory agencies and authorities and recommend
required steps and activities for improvement in such relationships;
* Monitoring overall compliance by the Company with the provisions of the National Insurance Commission
(NAICOM) and other relevant industry regulations;
* Co-coordinating and overseeing the effectiveness of the Company’s audit management and shall assist the
internal and external Auditors in preparing financial reports;

The committee held four meetings in the year 2019 and the attendance of directors stated below:

Meetings Held 1 2 3 4

20th March, 22nd May, 7th August, 13th

Names 2019 2019 2019 November,
2019

Seyi Bickersteth (Independent Chairman) √ √ √ √

Mr. Eugene Curley (Non-Executive Director, now
resigned) √ √ √ NLD

Mrs. Mowunmi Sotubo (Non-Executive

Director, now resigned) √ NLD NLD NLD

Mr. Tunde Hassan-Odukale (Now Managing Director)

√ √ √ √
Key:
√ Present NLD - No Longer a Director

c. Finance, Investment & General Purpose Committee

The Committee comprises two Non-Executive Directors and two Executive Director. Mr. Odein AJumogobia
(Independent) Chairs the Committee and other members are Mr. Jeremy Rowse (Non-Executive Director), Mr.
Tunde Hassan-Odukale (Now Managing Director) and Ms. Adetola Adegbayi (Executive Director).

This committee assists the Board in carrying out its oversight responsibilities by:
* Reviewing Management Accounts and reporting to the Board on Best Practice;
* Developing, monitoring and reviewing efficiency of the Company’s investment policies;
* Determining, developing and reviewing the Company’s investment parameters consistence with business
trends, Company’s investment capacity and compliance obligations;
* Ensuring at all times that the Company’s investment policies reflect the objectives of safety and maintenance of
fair returns on investments;
* Establishing standards, rules and guidelines for the Company’s investment management operations;
* Evaluating the value of the daily market-to-market portfolios and make proposals to the Company’s Board
accordingly;
* Reviewing from time to time the Company’s investment strategy with a view to sustaining medium to long term
competitive edge.
32 ANNUAL REPORT
& ACCOUNTS 2019

Corporate Governance Report Continued

for the year ended 31 December 2019

The committee held four meetings in the year 2019 and the attendance of directors stated below:

Meetings Held 1 2 3 4

20th March, 22nd May, 7th August, 13th

Names 2019 2019 2019 November,
2019

Mr. Odein Ajumogobia (Independent, Chairman) √ √ √ √

Mr. Jeremy Rowse (Non-Executive Director) √ √ √ √
Mr. Tunde Hassan-Odukale (Now Managing Director) √ √ √ √
Ms. Adetola Adegbayi (Executive Director) √ √ √ √
Key:
√ Present
d. Nomination, Remuneration & Governance Committee

The Committee comprises two Non-Executive Directors. Mr. Eugene Curley (Non-Executive Director) Chairs
the Committee and the other member is Gen. Martin Luther Agwai (Independent).

This committee assist the Board in carrying out its oversight responsibilities by:
* Annually reviewing the structure, size and composition (including the skills, knowledge, experience and
diversity) of the Board and other Committees;
* Giving full consideration to and ensuring the company has a succession policy and planning for the Chairman of
the Board, Managing Director, all other Executive Directors, Non-Executive Directors and other Senior
Management positions;
* Being responsible for the process of identifying and nominating for the approval of the Board, candidates to fill
Board vacancies as and when they arise;
* Establishing a formal and transparent process for Board appointments, including establishing the criteria for
appointment to the Board and Board committees, reviewing prospective candidates’ qualifications and any
potential conflict of interest; assessing the contribution of current Directors against their re-nomination
suitability, and making appropriate recommendations to the Board;
* Developing a process for, and ensuring that the Board undertakes, an annual performance evaluation of itself, its
committees, the Chairman and individual Directors, as well as the Company’s corporate governance practices.
* Undertaking the annual assessment of the independent status of Independent Non-Executive Directors (INED);
* Considering the extent to which the company’s governance arrangements are consistent with the various
Corporate Governance Codes, and making recommendations to the Board accordingly;
* Reviewing the governance section of the annual report and making recommendations to the Board for approval;
* Develop, review, administer and recommend to the Board for approval of Corporate Governance policies;
* Reviewing annually the Key Performance Indicators (KPIs) set for the Chief Executive and Executive Directors
by the Board and their performance evaluation;
* Ensuring the development and periodic review of Board charters, Board committee charters and other
governance policies, such as the code of ethics, conflict of interest and whistle blowing policies among others.

The committee held two meetings in the year 2019 and the attendance of directors stated below:
Meetings Held 1 2 3 4

20th March, 22nd May, 1st 13th

Names 2019 2019 November, November,
2019 2019

Mr. Eugene Curley (Non-Executive Director, Chairman) √ √ NLD NLD

Gen. Martin Luther Agwai (Independent) √ √ √ √

Key:
√ Present NLD - No Longer a Director
ANNUAL REPORT
& ACCOUNTS 2019 33
Corporate Governance Report Continued
for the year ended 31 December 2019

CUMMULATIVE YEARS OF SERVICE

a. Tenure of directors

The tenure for the Managing Director and the Executive Directors are determined by the Board taking into
account performance, the existing succession planning mechanism, continuity of the Board and the need for
continuous refreshing of the Board.
The tenure of each of the company’s Non-Executive Director is for a defined period and can be re-elected for
additional terms subject to satisfactory performance and approval by the shareholders. However, the principles
of the Nigerian Code of Corporate Governance 2018 caps the tenure of an Independent Non-Executive Director
at a cumulative term of nine years.

Directors Directors Years of Service

1 Gen. (rtd) Martin Luther Agwai (Chairman,

Independent) 10th November, 2016 3 years 3 months

2 Tunde Hassan-Odukale (Executive Director) 1st January, 2020 Two months

3 Jeremy Rowse (Non-Executive) 31st July 2007 12 years, 3 months

4 Adetola Adegbayi (Executive Director) 6th December, 2012 7 years, 3 months

5 Seyi Bickersteth (Non-Executive, Independent) 1st January, 2017 3 years, 1 month

6 Odein Ajumogobia (Non-Executive, Independent) 1st January, 2017 3 years, 1 month

7 Martyn Parker (Non-Executive) 3rd February, 2020 1 month

Our erstwhile Managing Director, Oye Hassan-Odukale retired from the Board effective 31st December,
2019 having successfully steered the wheels of the company for the past thirty-five years.

The Board of Directors and the company’s regulator, the National Insurance Commission has approved the
appointment of Tunde Hassan-Odukale as Managing Director effective 1st January, 2020.

The company is committed to consistently refreshing its Board and Board Committees to guarantee
improved value contribution to the company in line with global best practice.

b. External auditor

KPMG Professional Services was appointed as the company’s External Auditor in 2018 following the expiration of
the 5 year tenure of PricewaterhouseCoopers Chartered Accountants as required by the National Insurance
Commission Code of Corporate Governance 2009. This was before the advent of the Nigerian Code of Corporate
Governance 2018 which provided for a 10 year tenure to External Auditors.

The Company went through a tender process and after careful review of the value proposition of the bidders and
the commitment to avoid potential conflict of interests in relation to non-audit services and ensure the
independence of the auditor, KPMG was selected and approved by the company’s shareholders at the 2018 AGM.

The audit partner leading the 2019 financial audit is Kabir Okunlola and has held the role for two years. The role of
audit partner will be rotated after completion of the 2022 year end audit in line with the Nigerian Code of
Corporate Governance 2018 and best practice.

c. Statement on availability of code of business conduct and ethics

The company has a Board approved Code of Business Conduct and Ethics which sets out broad principles and
practices that guide each and every member of the Board, Management and employees in their conduct and
decision making for the company. The directors, Management and employees are abreast with the Code of
Business Conduct and Ethics and have declared their understanding of their fiduciary duty to shareholders and
other stakeholders of the Company.
34 ANNUAL REPORT
& ACCOUNTS 2019

Corporate Governance Report Continued

for the year ended 31 December 2019

HIGHLIGHTS OF HUMAN RESOURCES MANAGEMENT

HR policy highlights

The Company has established the underlined Human Resources policies which is undergoing Management
review as part of the company’s commitment to ensure continued applicability and growing changes in the
Human Resource space and workspace dynamism.
•Learning and Development Policy focuses on the provision of effective and appropriate training and
development for all employees to constantly update their knowledge, skills, abilities and attitudes using the
70:20:10 learning framework. It also fosters professional development by catering for subscription and
certification with respective globally recognized bodies. Every employee is guaranteed at the minimum 16
hours of training annually.
•Performance Management Policy is to establish and maintain a performance culture, creating an enabling
environment for employees to develop their abilities and achieve optimal possible potential to ensure a
workplace where the staff performance review process is fair, consistently applied and shall not be perceived
nor used as a punitive system. The process is designed to measure the achievement of company strategic
goals.
• Recruitment & Selection Policy seek to attract, select, recruit and retain people with the right skill set,
expertise, experience and qualifications to meet business aspirations, whilst offering a rewarding and
fulfilling career with opportunities for growth and personal development. The recruitment process is driven
by the Workforce plan, utilizing the Build, Borrow and Buy strategy.
• Compensation & Benefit Policy adopts a compensation philosophy that ensures employees are equitably
remunerated within competitive market salary scales to drive and reward excellent performance utilizing
global recognized frameworks. The aim is to maintain a pay structure that attracts, motivates and retains the
highest caliber of talents at all levels. These include recognition awards, short and long term incentives pay as
well as non-monetary rewards, benefits and perquisites.
• Social Media (Internet Usage) Policy is to enable employees to participate online in a respectful, relevant
way that protects the company’s reputation. The policy is intended to protect the business confidentiality, its
network, computing resources and information assets.
• Flexi – Work Policy aims to encourage flexible working arrangements with the dynamics in the business
environment. It recognizes that a better work-life balance can improve employee motivation, productivity,
improved competitiveness while reducing staff turnover and ensuring employees fulfil their work
requirements as well as other family/personal commitments.
• Disciplinary Policy is designed to correct unacceptable conduct or behaviour of employees where there is
a breach of any rule, regulation, policy or procedure. The company takes comprehensive approach regarding
discipline and will consider all facts before a decision is taken.
• Grievance Policy is designed to provide a transparent framework to deal with conflicts that may arise out
of employment relationships. This is in alignment with company’s desire to provide an environment that is
productive, encourages growth and achieves business objectives. The process ensures that all employees are
treated in a fair and consistent manner.
• Expatriate Policy provides a guide to ensuring standardized management of expatriates within the
company, ensuring established need, value delivery, knowledge transfer, optimizing the cost in the
engagement of expatriates and consistency in mobility policy.
ANNUAL REPORT
& ACCOUNTS 2019 35
Corporate Governance Report Continued
for the year ended 31 December 2019

WORKPLACE INITIATIVES

• Capability Building – One of such is Leader-led sessions, a business continuity initiative that ensures
knowledge transfer across the company it provides the opportunity to directly address knowledge gaps from day
to day operation and increase breadth of knowledge in teams. We also have instituted, job rotation and
expansions, mentorship and coaching frameworks, Talent Exchange programme and pipeline building, Quarterly
Performance Reviews where we proactively assess market dynamics and align our strategies accordingly.

• Employee Engagement and Support – The Company recognizes that employee engagement is a key driver of
productivity which directly impacts profitability. It has multifaceted initiatives to feel the pulse of the workforce
and creating tools and drivers for such engagements that drive workplace productivity. These include Annual
Engagement Surveys, Town Halls and Village Meetings, Open days, Dial in sessions, CSR events etc. In addition we
practice customized onboarding systems, Team Bonding, Happy Hour, motivational talks, career conversations.
We have structured support systems such as fund channels, Health plans and annual medical checks, Gym,
Crèche, Corporate Fitness, interdepartmental-games, Employee Wellbeing Sessions as well as Employee
Assistance Programs in place to drive and create an exceptional employee experience.

•Diversity and Inclusion – As an equal opportunity organization, the company is committed to an inclusive
culture that respects and embraces the diversity of employees, clients and community. This aimed to attract,
develop and retain the best people from all culture, ethnicity, gender, abilities, background and experiences.

• Acculturation – This initiative aims to entrench the company’s core values thereby sustaining the right culture
among employees in order to drive business performance.

INTERNAL MANAGEMENT STRUCTURE

MD

ED

Divisional Director

Senior Associate Director

Associate Director

Associate

Senior Analyst

Analyst

Graduate Trainees
36 ANNUAL REPORT
& ACCOUNTS 2019

Corporate Governance Report Continued

for the year ended 31 December 2019

HIGHLIGHTS OF PROGRAMS ON SOCIAL ISSUES

HIGHLIGHTS OF CASES OF CLAW BACK

In line with the company’s Claw Back policy, the Nomination, Remuneration & Governance Committee has
reviewed the company’s account and financial performance to ascertain if there has been undeserved award
arising from the company’s account and financial performance that has been materially false, misstated,
misleading, erroneous, or there has been instances of misdemeanour, fraud, material violation of Company policy
or material regulatory infractions.
The Committee has satisfied itself that there is no incidence necessitating the company to recover excess or
undeserved reward, such as bonuses, incentives, share of profits, or any performance-based reward, from
Directors and senior employees.

FINES AND PENALTIES

This has been disclosed in notes 41 & 42

NATURE OF ANY RELATED PARTY TRANSACTIONS

This has been disclosed in note 40

DIRECTORS’ RENUMERATION POLICY

Remuneration policy of Leadway was approved in 2019 and shall apply for a period of three (3) years except there
is an earlier review to ensure its continued appropriateness on applicability. The remuneration of Non-executive
directors is not necessarily market leading but reflective of the prudence and conservatism of the company
without undermining sufficient remuneration commensurate with the dedication and responsibility of directors.
The remuneration of executive directors is fairly competitive and incentivizes the directors to achieve the
business plan, in alignment with company’s long term strategy and to promote the retention of executive
directors.
The remuneration of directors takes into primary consideration the performance of the company and prevailing
economic situation.

Remuneration Elements Payment mode

Basic Salary Monthly

Salaries earned during the payroll period. Annually

Variable Pay Quantitative

A performance based sum awarded to Executive Gross Premium, Profit Before Tax (PBT), Taxes,
Directors for attaining or exceeding their assigned KPIs. R e t u r n o n I nve s t e d C a p i t a l ( RO I C ) a n d
performance of Leadway.

Long term incentive plan ·Qualitative

A plan created to reward directors for attaining Strategic milestones and initiatives that need to
company’s long term goals and shareholders’ interest. be achieved and implemented on areas such as
This aids the retention of key personnel and promotes strategy, innovation, business development,
commitment to long term growth. synergy, human capital management, financial
management and societal development.
ANNUAL REPORT
& ACCOUNTS 2019 37
Corporate Governance Report Continued
for the year ended 31 December 2019

NON-EXECUTIVE DIRECTORS
Category-Fixed/Variable Component Component description

Fixed Fees A fixed annual sum provided to Non- Executive Directors for
their ongoing contribution to the Board and as an incentive to
attract and retain talent. This is payable on a quarterly basis.

Fixed Meeting/Sitting A payment made to Non-Executive Directors on a per-meeting

allowance basis. This is condition on attendance (physical or virtual) which
is a prerequisite for remittance.

Fixed Medical A fixed annual amount paid to Non-Executive Directors for the
Allowance medical needs and upkeep. This is payable on the first working
day of every year.

Notes of this report highlights the remuneration paid to directors.

SUMMARY OF RISK MANAGEMENT FRAMEWORK

Introduction
The Summary of the Risk Management Framework is contained in the Risk Management disclosures on page 72.

STATEMENT ON THE COMPANY’S ESG ACTIVITIES

The Company is aware of its responsibilities on Environmental, Social and Governance activities and is committed
to economic growth and social value creation by supporting the development of the insurance industry,
supporting internal and external stakeholders as well as the society in which it operates while promoting the
education of the present and next generations. The Company also impacts tremendously the lives of the less
privileged in the society through its corporate social responsibility, ensuring nationwide reach from Internally
Displaced Persons to public schools and physically challenged persons in the parts of the country.

STATEMENT ON THE BOARD’S LEVEL OF APPLICATION OF THE CORPORATE GOVERNANCE CODE

The Board of Leadway Assurance engaged the services of Ernst & Young to evaluate its level of compliance with
the Nigerian Code of Corporate Governance. The Board, in its commitment to ensure compliance with the Code,
has taken steps to remedy gaps identified and is now sufficiently compliant with the Code. The Board is confident
that the Corporate Governance Report in the 2020 annual report would reflect the Company’s adequate
compliance and application of the Code.

BY ORDER OF THE BOARD

Olumide Hanson
FRC/2019/NBA/00000019064
Company Secretary
121/123 Funso Williams Avenue
Iponri
Lagos
5 March 2020
38 ANNUAL REPORT
& ACCOUNTS 2019

Complaint and Feedback Statement

Strategy for Handling Customer Feedback and Complaints

We are currently running our three year planning horizon (2017 – 2020). As customers progressively become more informed and
erudite, there is greater demand for customized and personalized insurance products and services.

One of our key strategy to providing an enhanced customer experience is our provision of a 24/7 customer service. This ensures
continuous customer engagement through our complaints management and customer resolution. Our Investment in technology
has grown tremendously to provide our customers with the option of self –service . To this regard a continuous gear to enhancing
our own data management is very pertinent. We have also improved our feedback gathering mechanisms. Our services have been
extended to managing our customers efficiently through our digital platforms which includes our Mobile Apps, Web chats,
WhatsApp and CRM integration. We are constantly incorporating customer feedback from these channels into product design/
redesign. This has resulted in improved product acceptability and reduced cases of product failures and attainment of customer
goodwill.

With the above, Leadway seeks to expand its customer loyalty with an all-inclusive view and wider understanding of the customer.
Customer journey maps and plans are being developed based on insights and analysis from direct feedback from customers. This
has proven to be very effective in understanding customer’s pain points and boosting our customer retention.

Complaints Channels
We have provided various channels for customers to provide feedback on our products and services.
These platforms include:

• Our Leadway Assurance Company Limited Customer Service front desks, corporate office and designated branches for
walk-in customers
• Complaint e-mail channel; insure@leadway.com
• Our Leadway Assurance Company Limited hotlines; 01-2700700, 01-2800700, 08129997027, 08129997178
• Our website platform; www.leadway.com
• Our Leadway Mobile App
• Our Leadway WhatsApp - 08080577724
• Social media
- Facebook - www.facebook.com/LeadwayAssurance/
- Twitter - @LeadwayInsure
- Google Plus - Plus.google.com/+LeadwayAssurance
- Linkedin - www.linkedin.com/company/leadway-assurance-co--ltd

Customers can also pay a visit to any of our Leadway Assurance Company Limited Welcome Centers located across the country for
business enquiries and resolution.

Resolution Mechanism

At Leadway Assurance Company Limited, we have put in place a standard system to ensure that customers’ feedback are received
and promptly resolved. For this purpose we have a dedicated Customer Service Department (CSD) which is responsible for the
prompt investigation and resolution of customers’ complaints within the approved period. The Customer Service Department
liaises with other units within the organization and ensures that customers’ complaints are satisfactorily resolved.

Customers’ complaints are stream-lined based on the type of complaints to provide an enabling environment for proper
monitoring, proper documentation and effective feedback process of received complaints.

The process flow of customer complaint and resolution is as follows:

• The customer care officer acknowledges and attends to the various customers’ complaints.
• The complaint is reviewed and it is determined if the complaint could be resolved at first-level.
• Where the complaint can be resolved at the first level, a resolution is immediately provided to the customer.
• If such complaint cannot be resolved at the first level, the customer care officer creates a case on our Dynamics CRM
(Customer Relationship Management) application. This will in turn generate a Case ID number for escalation and tracking of
case to resolution.
• Customer Care officer forwards and follow-up on the complaint with the appropriate unit in the organization to handle.
• Upon resolution, the customer is contacted and the resolution is explained to the customer.
• The case is closed and marked as resolved.

In addition to our present process, we are currently building a more robust CRM to adequately manage all complaints and to give
the best response time in this area of our services.
ANNUAL REPORT
& ACCOUNTS 2019 39
Complaint and Feedback Statement Continued

Customers’ loyalty and opinion on products

To enrich our customers experience we also periodically evaluate public/customer opinion about our services,
products and policies. The evaluation is conducted in various ways including:

• One-on-one focus meetings with key customers

• Interviews with selected customers
• Online Customer Feedback Survey and Questionnaires administered to customers

This is to afford our organization the opportunity of receiving customers’ perception about the company, in order to
ensure that efforts can be put in place to close such gap(s) in our service delivery or improve upon the process, service
or product.

Feedback on Customers’ Complaints to Leadway Assurance

Feedback on customers’ complaints is provided to Management and other relevant Units in the organization

The feedback gathered ensures that:

• Leadway Assurance Company Limited retains her customers as customers feel appreciated and respected,
• The quality service delivery at Leadway Assurance Company Limited is maintained and made uniform across
board.
• A reliable source of identifying improvement opportunities is presented to management.
• A reliable source of data on customers’ complaints and expectations is collated.

The feedbacks are circulated to management staff through the company’s internal information channel for the
general information of all staff.

Report of complaints received and resolved by the organization between January-December 2019.

Month Complaints Number of Number Number of

received complaints complaints unresolved
during resolved unresolved complaints
the year within SLA*
January 10 7 - 3
February 3 2 - 1
March 6 5 - 1
April 1 1 - -
May 3 3 - -
June 1 1 - -
July 5 4 - 1
August 8 8 - -
September 4 4 - -
October 2 1 - 1
November 2 2 - -
December 4 3 - 1
Total 49 41 8

Complaints not resolved within the turnaround time, can be attributed mainly to the unavailability of these
customers either via mail or phone call after resolution of their complaint but all complaints are usually treated within
24hrs (depending on the source of the error).
40 ANNUAL REPORT
& ACCOUNTS 2019

Independent Auditor’s Report

KPMG Professional Services Telephone 234(1) 271 8955

KPMG Towers 234(1) 271 8599
Bishop Aboyade Cole Street Internet home.kpmg/ng
Victoria Island
PMB 40014, Falomo
Lagos

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Leadway Assurance Company Limited

Report on the Audit of the Consolidated and Separate Financial Statements

Opinion
We have audited the consolidated and separate financial statements of Leadway Assurance Company
Limited (“the Company”) and its subsidiary (together, “the group”), which comprise the consolidated
and separate statements of financial position as at 31 December, 2019, and the consolidated and
separate statements of profit or loss and other comprehensive income, consolidated and separate
statements of changes in equity and consolidated and separate statements of cash flows for the year
then ended, and notes, comprising significant accounting policies and other explanatory information, as
set out on pages 44 to 155.
In our opinion, the accompanying consolidated and separate financial statements give a true and fair view
of the consolidated and separate financial position of the Company and its subsidiary as at 31 December,
2019, and of its consolidated and separate financial performance and its consolidated and separate cash
flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) and
in the manner required by the Companies and Allied Matters Act, Cap C.20, Laws of the Federation of
Nigeria, 2004 and the Financial Reporting Council of Nigeria Act, 2011 and the Insurance Act 2003 and
relevant National Insurance Commission of Nigeria (“NAICOM”) Circulars.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the consolidated and separate Financial Statements section of our report. We are independent of the
Group and Company in accordance with the International Ethics Standards Board for Accountants’ Code
of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are
relevant to our audit of the consolidated and separate financial statements in Nigeria and we have fulfilled
our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

Valuation of Insurance Contract Liabilities

The Company has significant life and general insurance contract liabilities of N296.70 billion (2018: N
225.44 billion). The valuation of insurance contract liabilities involves high estimation uncertainties and
management makes significant judgments over uncertain future outcomes.
ANNUAL REPORT
& ACCOUNTS 2019 41
Independent Auditor’s Report Continued

Provisions for reported claims are based on historical experience, however, the eventual liabilities may
differ from the estimated amounts. Furthermore, the estimated liability for claims that have occurred but
are yet to be reported in respect of general insurance contracts involve economic assumptions about
inputs such as inflation rate, ultimate loss ratio and discount rates, hence the eventual outcome is
uncertain.

The actuarial assumptions used in the valuation of life insurance contract liabilities are judgmental,
particularly with respect to mortality rates, expenses and discount rates.

The level of complexity, the assumptions and judgment involved in estimating these amounts make
insurance contract liabilities a matter of significance to our audit.

How the matter was addressed in our audit

Our audit procedures included the following:

• We tested the accuracy and completeness of the data used in actuarial valuations by checking
selected samples of the claims paid, outstanding claims and underwriting information to the underlying
data.
• We engaged our actuarial specialists to challenge the appropriateness of the methodology used
by the Company's external actuary in calculating the insurance contract liabilities. This involved an
assessment of the appropriateness of the valuation methods, taking into account industry practice and
specific product features of the Company.
• With the assistance of our actuarial specialist, we evaluated the reasonableness of the actuarial
assumptions used by the Company's external actuary and independently performed liability adequacy
tests on insurance contract liabilities including assumptions and estimates on the projected cash flows,
basic chain ladder runoff period, inflation rate, mortality and discount rate by comparing them to the
Company specific data and market experience.
• We assessed whether the Company's valuation methodology and assumptions were consistent
between reporting periods. We were also assisted by our actuarial specialists in this regard.

The Company's accounting policy on valuation of insurance contract liabilities and related disclosures are
shown in notes 2.13 and 2.14 (accounting policy), note 4(a) (critical accounting estimates and judgments)
and note 22 (insurance contract liabilities) respectively.

Other Information
The Directors are responsible for the other information. The other information comprises its corporate
profile, directors' report, statement of directors' responsibilities, corporate governance report, complaint
and feedback statement management discussions and analysis, value added statement, five year
financial summary, general business statement of financial position, general business statement of
comprehensive income, general business revenue account, life business statement of financial position,
life business statement of comprehensive income, life business revenue account, deposit administration
revenue account, life business annuity statement (but does not include the consolidated and separate
financial statements and our auditor’s report thereon) which we obtained prior to the date of this auditor's
report. It also comprises the Chairman's statement, Leadway at a glance, information on Leadway
subsidiary, branch directory report and corporate information (together "the outstanding reports"), which
are expected to be made available to us after the date of this auditor’s report.
Our opinion on the consolidated and separate financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
42 ANNUAL REPORT
& ACCOUNTS 2019

Independent Auditor’s Report Continued

In connection with our audit of the consolidated and separate financial statements, our responsibility is to
read the other information and in doing so, consider whether the other information is materially
inconsistent with the consolidated and separate financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If, based on the work we have performed, on the
other information obtained prior to the date of the auditor's report, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
When we read the outstanding reports, if we conclude that there is a material misstatement therein, we
are required to communicate the matter to those charged with governance.

Responsibilities of the Directors for the Consolidated and separate Financial Statements
The Directors are responsible for the preparation of consolidated and separate financial statements that
give a true and fair view in accordance with IFRSs and in the manner required by the Companies and
Allied Matters Act, Cap C.20, Laws of the Federation of Nigeria, 2004 and the Financial Reporting Council
of Nigeria Act, 2011, the Insurance Act 2003 and relevant National Insurance Commission of Nigeria ("
NAICOM ") Circulars, and for such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement. whether due to fraud or
error.
In preparing the consolidated and separate financial statements, the directors are responsible for
assessing the Group and Company's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the directors
either intend to liquidate the Group and Company or to cease operations or have no realistic alternative
but to do so.

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

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
Ÿ Identify and assess the risks of material misstatement of the consolidated and separate financial
statements, whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Ÿ Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group (and Company)’s internal control.
Ÿ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Ÿ Conclude on the appropriateness of directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group (and Company)’s ability to continue as a going
ANNUAL REPORT
& ACCOUNTS 2019 43
Independent Auditor’s Report Continued

concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the consolidated and separate financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Group (and Company) to cease to continue as a going concern.
Ÿ Evaluate the overall presentation, structure and content of the consolidated and separate financial
statements, including the disclosures, and whether the consolidated and separate financial
statements represent the underlying transactions and events in a manner that achieves fair
presentation.
Ÿ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.

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

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

From the matters communicated with the Audit Committee, we determine those matters that were of
most significance in the audit of the consolidated and separate financial statements of the current period
and are therefore the key audit matters. We describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.

Report on Other Legal and Regulatory Requirements

Compliance with the requirements of Schedule 6 of the Companies and Allied Matters Act, Cap C. 20, Laws of the
Federation of Nigeria 2004 and Section 28(2) of the Insurance Act 2003

In our opinion, proper books of account have been kept by the Company, so far as appears from our
examination of those books and the Company’s statement of financial position and statement of profit or
loss and other comprehensive income are in agreement with the books of account.

Kabir O. Okunlola, FCA

FRC/2012/ICAN/00000000428
For: KPMG Professional Services
Chartered Accountants
22 May 2020
Lagos, Nigeria
44 ANNUAL REPORT
& ACCOUNTS 2019

Company Information and Summary

of Significant Accounting Policies
for the year ended 31 December 2019

1 General information
Leadway Assurance Company Limited is a company incorporated and domiciled in Nigeria. The address of its
registered office is NN 28/29 Constitution Road, Kaduna State, Nigeria. The Company was incorporated as a
private limited liability company on 22 September 1970. It obtained a license to operate as an insurance
company in January 1971 and commenced business in January 1971.

The Company is principally engaged in the business of providing risk underwriting and related financial
services to its customers. Such services include provision of life and general insurance underwriting
insurance risks to both corporate and individual customers.

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are
set out below. These policies have been consistently applied to all the years presented, unless otherwise
stated. The financial statements are for the Leadway Assurance Company Limited.

2.1 Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) and IFRS Interpretations Committee (IFRIC) as issued by the international Accounting
Standards Board (IASB)

The consolidated financial statements have been prepared under the historical cost convention except for
the following:

i. Financial instruments at fair value through profit or loss

ii. Available for sale financial assets measured at fair value
iii. Investment properties measured at fair value
iv. Revaluation of land and buildings measured at fair value
v. Insurance liabilities measured at fair value of estimated future cashflows

Use of estimates & judgements : The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to exercise its judgement in the
process of applying the company’s accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed in note 4.

Financial & functional currency: These consolidated financial statements are presented in Naira which is the
groups functional currency. All amounts are in thousands unless otherwise stated
ANNUAL REPORT
& ACCOUNTS 2019 45
Company Information and Summary
of Significant Accounting Policies Continued
for the year ended 31 December 2019

2.2 Changes in accounting policy, amendments and disclosures

2.2.1 New and amended standards adopted by the company

The following new or revised standards and amendments which have a potential impact on the company are effective
for the year ended 31 December 2019 and have been applied in preparing these consolidated financial statements.

Standard Effective date Comments

IFRS 16, ‘Leases’ 1 January IFRIS 16 was issued in January 2016. It will result in almost all
2019 leases being recognised on the balance sheet, as the distinction
between operating and finance leases is removed.
Under the new standard, an asset (the right to use the leased
item) and a financial liability to pay rentals are recognised. The
only exceptions are short-term and low-value leases.
The accounting for lessors will not significantly change.

This is the first set of company financial statements in which

IFRS 16 'Leases' has been applied, the related changes to
significant accounting policies are described in note 2.12

IFRIC 23, ‘Uncertan Over Income Tax Treatments’ 1 January The interpretation is to be applied to the determination of
2019 taxable profit (tax loss), tax bases, unused tax losses, unused tax
credits and tax rates, when there is uncertainty over income tax
treatments under IAS 12.

If an entity concludes it is not probable that the taxation

authority will accept an uncertain tax treatment, the entity shall
reflect the effect of uncertainty in determining the related
taxable profit (tax loss), tax bases, unused tax losses, unused tax
credits or tax rates.

If an uncertain tax treatment affects current tax and deferred

tax (for example, if it affects both taxable profit used to
determine current tax and tax bases used to determine
deferred tax), an entity shall make consistent judgments and
estimates for both current tax and deferred tax.
46 ANNUAL REPORT
& ACCOUNTS 2019

Company Information and Summary

of Significant Accounting Policies Continued
for the year ended 31 December 2019

2.2.2 New standards and interpretations not yet effective

The following new or revised standards and amendments which have a potential impact on the company are
not yet effective for the year ended 31 December 2019 and have not been applied in preparing these
consolidated financial statements. The company also plans to apply all the standards and amendments
disclosed below once they are applicable. However, the Company's assessments of the new standards and
amendments is not yet concluded but is expected to have significant impact on our Company operations and
financial position

IFRS Effective Date Key Requirements

IFRS 17, ‘Insurance Contract’ January 2023 IFRS 17 establishes the principles for the
recognition, measurement, presentation and
disclosure of insurance contracts within the scope
of the standard. The objective of IFRS 17 is to
ensure that an entity provides relevant information
that faithfully represents those contracts. This
information gives a basis for users of financial
statements to assess the effect that insurance
contracts have on the entity's financial position,
financial performance and cash flows

IFRS 9 Financial Instruments (Effective 1 Jan 2018)

IFRS 9, Financial instruments, issued by the IASB in July, 2014, fully replaces IASB 39 and provides a new
approach on how to classify financial instruments based on their cash flow characteristics and the business model
under which they are managed. Furthermore, the standard introduces new rules for forward-looking impairment
model for debt instrument and provides new rules for hedge accounting.

It can be assumed that the main impact from IFRS9 will arise from the new classification rules leading to more
financial instrument being measured at a fair value through income as well as the new impairment model.
Interdependencies with IFRS17 will need to be considered to assess the ultimate combined impact of both
standards.

The amendments to IFRS4, Applying IFRS9 Financial Instruments with IFRS4 Insurance Contracts, issued in
September 2016, allow entities that issue insurance contracts within the scope of IFRS 4 to defer the
implementation of IFRS 9 until January 2021 under certain circumstances. It is to be noted that the IASB has
recently proposed to defer the IFRS9 effective date for such entities in scope by another year until 2022.

Given the strong interrelation between the measurement of direct participating insurance contracts and the
underlying assets held, the Leadway Assurance Company has decided to use the option to defer the full
implementation of IFRS 9 until IFRS 17 becomes effective.

In order to qualify for temporary exemption, an entity has to prove that its activities are predominantly connected
to insurance as of 31 December 2015. Under the amended IFRS4, this condition is met if the insurer carries
significant liabilities arising from contracts within the scope of IFRS4. Significant insurance-related liabilities are
given, among others, if the percentage of the total carrying amount of liabilities connected with insurance relative
to the total carrying amount of all liabilities is greater than 90%. A reassessment at a subsequent annual reporting
date is required if, and only if, there was a change in the entity’s activities during the annual period that ended on
that date.

As of 31 December 2015, the Leadway Assurance Company recorded a total amount of liabilities connected with
insurance of N114.6b, which represented more than 90% of its total liabilities of N119.3b. Moreover, of the
amount connected with insurance contract, N109.2b were related to liabilities arising within the scope of IFRS 4.
Other insurance related liabilities amounted to N5.4b and included mainly other liabilities like trade payables. The
Company did not have any non-derivative investment contract liabilities measured at fair value through income
statement. No change in the activities of the Leadway Assurance Company occurred subsequently that would
have required a reassessment.
ANNUAL REPORT
& ACCOUNTS 2019 47
Company Information and Summary
of Significant Accounting Policies Continued
for the year ended 31 December 2019

Company
FINANCIAL ASSET UNDER IFRS 9 CLASSIFICATION OF ASSET
As At 31st Dec 2019 ***Financial Assets that meet SPPI All Other Financial Asset

Fair Value Fair Value Change Fair Value Fair Value Change
N’000
Cash and cash equivalent 26,210,607
Debt Securities:
Treasury Bill 5,178,618 - - -
Government Bonds 29,341,025 2,571,954 - -
Corporate Bonds 6,638,943 (15,425) - -
Sub Total 41,158,586 2,556,529 - -
Loans and advances 1,229,744 (320,695) - -
Other Assets 529,508 (35,762) - -

Equity Securities-Quoted - - 15,487,864 (2,051,933)

Equity Securities-Unquoted - - 6,186,378 579,704
Others - -
Sub Total - - 21,674,242 (1,472,229)

Grand Total 69,128,445 2,200,072 21,674,242 (1,472,229)

***These exclude those that meet the definition of held for trading under IFRS 9 or those managed and whose performance is
evaluated on fair value basis.

Company
CARRYING AMOUNT OF FINANCIAL ASSET THAT MEET SPPI CRITERION BY RATING
Cash and cash Corporate
Rating Agency Equivalents Treasury Bill Government Bonds Bonds Others
Investment Grade
B2 Moody - 5,178,618 29,341,025 - -
B2 Moody - - - 6,459,633 -
A+ OCR - - - - -
Not rated 26,210,607 - - 179,310 1,759,252
26,210,607 5,178,618 29,341,025 6,638,943 1,759,252
48 ANNUAL REPORT
& ACCOUNTS 2019

Company Information and Summary

of Significant Accounting Policies Continued
for the year ended 31 December 2019

Prepayment Features with Negative comparison (Amendments to IFRS 9)

This amendment was published to address the concerns about how IFRS 9 'Financial Instruments' classifies
particular prepayable financial assets. In addition, the IASB clarifies an aspect of the accounting for financial
liabilities following a modification. The amendments are to be applied retrospectively for fiscal years
beginning on or after 1 January 2019, i.e. one year after the first application of IFRS 9 in its current version.
Early application is permitted so entities can apply the amendments together with IFRS 9 if they wish so.

2.5 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Company’s entities are measured using the currency
of the primary economic environment in which the entity operates(the ‘functional currency’). Except
otherwise stated the consolidated financial statements are presented in thousands of Naira (NGN), which is
the Company’s functional and presentation currency.

(b) Transactions and balances

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

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value
in a foreign currency are translated into the functional currency at the exchange rate on the date when the
fair value was determined. Non-monetary assets that are measured based on historcial cost in a foreign
currency are translated at the exchange rate on the date of the transaction.

Foreign exchange gains and losses that relate to borrowings are presented in the statement of
comprehensive income within ‘finance income or cost’.
ANNUAL REPORT
& ACCOUNTS 2019 49
Company Information and Summary
of Significant Accounting Policies Continued
for the year ended 31 December 2019

Changes in the fair value of debt securities denominated in foreign currency and classified as available for sale are
analysed between translation differences resulting from changes in the fair value of the security, and translation
differences arising from changes in amortised cost. Translation differences related to changes in amortised cost
are recognised in statement of comprehensive income while translation related to changes in fair value are
recognised in other comprehensive income.

Translation differences on non-monetary financial assets and liabilities held at fair value through statement of
comprehensive income are reported as part of the fair value gain or loss. Translation differences on non-monetary
financial assets such as equities classified as available-for-sale financial assets are included in ‘other
comprehensive income’. except on impairment, in which case foreign currency differences that have been
recognised in OCI are reclassified to profit or loss.

The assets and liabilities of foreign operations including goodwill and fair value adjustments arising on acquisition
are translated at the exchange rate on the reporting date.
The income and expenses of foreign operations are translated at the exchange rate at the dates of transactions.
Foreign currency differences on foreign operations are recognised in OCI and accumulated in the translation
reserve, except to the extent that the translation difference is allocated to NCI.
50 ANNUAL REPORT
& ACCOUNTS 2019

Company Information and Summary

of Significant Accounting Policies Continued
for the year ended 31 December 2019

2.6 Financial assets and liabilities

In accordance with IAS 39, all financial assets and liabilities (including derivative financial instruments) have to be
recognised in the consolidated financial statements and measured in accordance with their assigned categories.
Category Classes as determined by the Sub-classes
(as defined by IAS 39) Company
Financial assets at Listed Debt Federal Government of
Financial assets Securities Nigeria bonds
fair value through
at fair value profit or loss Listed Equity
through profit securities Shares
or loss Listed Equity
Held for trading securities
Cash in hand and bank
Cash and cash equivalent
Placements
Treasury bills with original
maturity not more than 90 days.

Commercial loans
Loans and Loans to policyholders
receivables Loans and advances
Agency loans
Advances under finance lease
Insurance Due from contract, brokers, agents
Trade receivablesreceivables and Insurance companies
Financial assets
Reinsurance assets Due from reinsurers
Other receivables Other receivables
Listed equity Shares
Unlisted equity Shares
Investment State Government bonds
Available for FGN Treasury bills
securities Listed debt
sale securities Corporate bonds
Eurobonds
FGN bonds

Financial liabilities
at fair value Nil Nil Nil
through P&L
Trade payables Reinsurance payable
Financial liabilities Insurance payable
Other liabilities Commission payable
Financial liabilities Investment contract payable
at amortised cost Accrued expenses
Insurance contract liabilities Outstanding claims
Life funds
Term loans
Borrowings
Others

2.6.1. Financial Assets

Initial recognition
Regular-way purchases and sales of financial assets are recognised on the settlement date i.e. the date on which the
company receives value for a purchase/sale of assets. All financial assets are initially recognized at fair value, which
includes directly attributable transaction costs for financial instruments not classified at fair value through the
statement of comprehensive income

Subsequent measurement
Subsequent to initial measurement, financial instruments are measured either at fair value or amortised cost,
depending on their classification:

(a) Financial assets held at fair value through profit or loss

A financial asset is classified into the "financial assets at fair value through profit or loss" category at inception if so
designated by management at inception.

Financial assets designated as fair value through profit or loss at inception are those that are held in internal funds to
match insurance and investment contracts liabilities that are linked to the changes in fair value of these assets. The
designation of these assets to be at fair value through profit or loss eliminates or significantly reduces a
measurement or recognition inconsistency (sometimes referred to as " an accounting mismatch") that would
otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.

Upon initial recognition, attributable transaction costs are recognised in the statement of comprehensive income as
incurred. Subsequent to initial recognition, they are remeasured at fair value, with gains and losses arising from
ANNUAL REPORT
& ACCOUNTS 2019 51
Company Information and Summary
of Significant Accounting Policies Continued
for the year ended 31 December 2019

changes in this value recognized in Net fair value gains/(losses) in the statement of comprehensive income in the period
in which they arise. The fair values of quoted investments in active markets are based on current bid prices.

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

Financial assets at fair value through profit or loss are presented within "Operating activities" as part of changes in
working capital in the statement of cash flows.

(b) Held-to-maturity

Held-to-maturity investments are non-derivative financial assets with fixed determinable payments and fixed
maturities that management has both the positive intention and ability to hold to maturity other than:
- those that the Company upon initial recognition designates as at fair value through statement of comprehensive
income;
- those that the Company designates as available for sale; and
- those that meet the definition of loans and receivables.

Held to maturity investments include corporate and government bonds. Interests on held-to- maturity investments are
included in the consolidated financial statement and reported as interest income within investment income.

Held-to-maturity financial assets are recognised initially at fair value plus any directly attributable transaction costs
and are subsequently carried at amortised cost, using the effective interest method, less any accumulated impairment
losses. Any sale or reclassification of a more than insignificant amount of held-to-maturity investments not close to
their maturity would result in the reclassification of all held-to-maturity investments as available-for-sale, and prevent
the Company from classifying financial assets as held-to-maturity for the current and the following two financial years.

(c) Available-for-sale
Available for sale financial investments are made up of equities. The Company classifies as available-for-sale those
financial assets that are generally not designated as another category of financial assets, and strategic capital
investments held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in
interest rates, exchange rates or equity prices.

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

Dividends received on available-for-sale instruments are recognised in the statement of profit or loss when the
Company’s right to receive payment of the dividend has been established & the amount can be measured reliably.

(d) Loans and receivables

Loans and receivables include non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market, other than those classified by the Company as fair value through statement of comprehensive
income or available-for-sale. Loans and receivables consist of cash & cash equivalent, loans & advances, reinsurance&
co-insurance receivables, trade receivables and other receivables. These are managed in accordance with a
documented policy.

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

- Cash & cash equivalents

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

- Trade receivables
Trade receivables arising from insurance contracts are stated net of allowance made for specific debts considered
doubtful of recovery. Trade receivables are reviewed at every reporting period for impairment (See 2.6.1 (f) (iii)) for the
accounting policy on impairment of trade receivables).
52 ANNUAL REPORT
& ACCOUNTS 2019

Company Information and Summary

of Significant Accounting Policies Continued
for the year ended 31 December 2019

- Loans & advances

Loans & advances includes commercial loans, loans to policy holders, staff loans, annuity loans, mortgage loans and
agency loans and are recognised at amortised cost.

- Reinsurance and Co-insurance recoverables

The company cedes business to reinsurers in the normal course of business for the purpose of limiting its net loss
through the transfer of risks. Premium ceded comprise the share of gross written premiums transferred to reinsurers
based on agreed arrangements. Reinsurance arrangements does not relieve the Company from its direct obligation to
policy holders.

(e) Fair value measurement

The best evidence of the fair value of a financial instrument on initial recognition is the transaction price, i.e. the fair
value of the consideration paid or received, unless the fair value is evidenced by comparison with other observable
current market transactions in the same instrument, without modification or repackaging, or based on discounted cash
flow models and option pricing valuation techniques whose variables include only data from observable markets.

Subsequent to initial recognition, the fair values of financial instruments are based on quoted market prices or dealer
price quotations for financial instruments traded in active markets. If the market for a financial asset is not active or the
instrument is an unlisted instrument, the fair value is determined by using applicable valuation techniques. These
include the use of recent arm’s length transactions, discounted cash flow analyses, pricing models and valuation
techniques commonly used by market participants.

Where discounted cash flow analyses are used, estimated cash flows are based on management’s best estimates and
the discount rate is a market-related rate at the balance sheet date from a financial asset with similar terms and
conditions.

Where pricing models are used, inputs are based on observable market indicators at the balance sheet date and profits
or losses are only recognised to the extent that they relate to changes in factors that market participants will consider in
setting a price.

(f) Impairment of financial assets

(i) Financial assets carried at amortised cost

The carrying amounts of these assets are reviewed at each reporting date to determine whether there is any objective
evidence of impairment. A financial asset is considered to be impaired if objective evidence indicates that one or more
events that have occurred since the initial recognition of the asset have had a negative effect on the estimated future
cash flows of that asset and can be reliably estimated. Objective evidence that a financial asset or company of assets is
impaired includes observable data that comes to the attention of the Company about the following events:

- Significant financial difficulty of the issuer or debtor;

- A breach of contract, such as a default or delinquency in payments;
- It becoming probable that the issuer or debtor will enter bankruptcy or other financial reorganisation;
- The disappearance of an active market for that financial asset because of financial difficulties; or
- Observable data indicating that there is a measurable decrease in the estimated future cashflow from a company of
financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the
individual financial assets in the Company.

For financial assets measured at amortised cost, the Company first assesses whether objective evidence of impairment
exists individually for financial assets that are individually significant and individually or collectively for financial assets
that are not individually significant. Individually significant financial assets are tested for impairment on an individual
basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. An
impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its
carrying value and the present value of the estimated future cash flows discounted at the original effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is
recognised in the statement of comprehensive income. If the financial asset has a variable interest rate, the discount rate
for measuring any impairment loss is the current effective interest rate determined under contract. The Company may
measure impairment on the basis of an instrument’s fair value using an observable market price.

For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of similar credit risk
characteristics. Those characteristics are relevant to the estimation of future cashflows for groups of such assets by being
indicative of the issuer’s ability to pay all amounts due under the contractual terms of the debt instrument being evaluated.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised (such as improved credit rating), the previously recognised
impairment loss is reversed by adjusting the allowance account. The amount of the reversal is recognised in the statement
of comprehensive income.
ANNUAL REPORT
& ACCOUNTS 2019 53
Company Information and Summary
of Significant Accounting Policies Continued
for the year ended 31 December 2019

(ii) Assets classified as available-for-sale

Available-for-sale financial assets are considered impaired if there is objective evidence of impairment, resulting from one
or more loss events that occurred after initial recognition but before the reporting date, that have an impact on the future
cash flows of the asset. In the case of equity investments classified as available-for-sale, a significant or prolonged decline
in the fair value of the security below its cost is an objective evidence of impairment resulting in the recognition of an
impairment loss. In this respect, a decline of 20% or more is regarded as significant, and a period of 12 months or longer is
considered to be prolonged. If any such quantitative evidence exists for available-for-sale financial assets, the asset is
considered for impairment, taking qualitative evidence into account.

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

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

(iii) Trade receivables

Trade receivables, are a significant part of loans and receivables, are initially recognised at fair value and subsequently
measured at amortised cost less provision for impairment. An allowance for impairment is made when there is an objective
evidence (such as the probability of solvency or significant financial difficulties of the debtors) that the Company will not
be able to collect all the amount due under the original terms of the invoice. Allowances are made based on an impairment
model which considers the loss given default for each customer, probability of default and emergence period which serves
as an impairment trigger based on the age of the debt. Impaired debts are derecognised when they are assessed as
uncollectible. If in a subsequent period the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is
reversed to the extent that the carrying value of the asset does not exceed its amortised cost at the reverse date. Any
subsequent reversal of an impairment loss is recognised in the statement of comprehensive income.

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

2.6.2 Financial liabilities

The company classifies its financial liabilities, other than financial guarantees and loan commitments, as measured at
amortized cost or fair value through profit and loss

Investment contracts
Investment contracts are those contracts that transfer financial risk with no significant insurance risk.
Investment contracts with guaranteed and fixed terms are initially measured at fair value less transaction cost that are
incremental and directly attributable to the acquisition or issue of the contract.

The Company re-estimates at each reporting date the expected future cashflows and recalculate the carrying amount of
the financial liability by calculating the present value of estimated future cashflows using the financial liability's original
effective interest rate. Any adjustment is immediately recoginsed as income or expense in the statement of
comprehensive income.

Trade and Other Payables

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method. The fair value of a non-interest bearing liability is its discounted repayment amount. If the due
date of the liability is less than one year discounting is omitted.

2.6.3 Offsetting financial instruments

Financial assets and liabilities are set off and the net amount presented in the statement of financial position when, and
only when, there is a legally enforceable right to set off the recognized amounts and intends either to settle on a net basis
or to realise the asset and settle the liability simultaneously.
54 ANNUAL REPORT
& ACCOUNTS 2019

Company Information and Summary

of Significant Accounting Policies Continued
for the year ended 31 December 2019

2.6.4 De-recognition of financial instruments

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

Any interest in transferred financial assets that is created or retained by the Company is recognized as a separate asset or
liability. The Company derecognises a financial liability when its contractual obligations are discharged, cancelled or
expired.

2.7 Deferred acquisition costs

Acquisition costs comprise all direct and indirect costs arising from the origination of insurance contracts.
Deferred acquisition costs represent a portion of commission which are incurred during a financial year and are deferred
to the extent that they are recoverable out of future revenue margins. It is calculated on a time apportionment basis over
the tenor of the policies.

2.8 Investment property

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

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

Fair values are reviewed annually by independent valuer, holding a recognized and relevant professional qualification and
with relevant experience in the location and category of investment property being valued.

Subsequent expenditure on investment property is capitalized only if future economic benefit will flow to the Company
otherwise they are expensed as incurred.

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

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

2.9 Statutory deposit

These deposits represent bank balances required by the insurance regulators of the Company to be placed with relevant
central banks of Company's operating jurisdictions. These deposits are stated at cost. Interest on statutory deposits is
recognized as earned in other receivables and the corresponding amount is recognised in statement of comprehensive
income within investment income.

2.10 Intangible assets

(a) Goodwill
Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. Subsequent to initial recognition,
goodwill is measured at cost less accumulated impairment losses. Goodwill has an indefinite useful life and it is tested
annually for impairment.

Goodwill is allocated to cash-generating units or groups of cash-generating units for the purpose of impairment testing.
The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from
the business combination in which the goodwill arose identified in accordance with IFRS 3.

Goodwill has an indefinite useful life and is tested annually as well as whenever a trigger event has been observed for
impairment by comparing the present value of the expected future cash flows from a cash generating unit with the
carrying value of its net assets, including attributable goodwill and carried at cost less accumulated impairment losses.
Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount
of goodwill relating to the entity sold.
ANNUAL REPORT
& ACCOUNTS 2019 55
Company Information and Summary
of Significant Accounting Policies Continued
for the year ended 31 December 2019

(b) Purchased software

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

Internally developed software is capitalized when the Company has the intention and demonstrates the ability to
complete the development and use of the software in a manner that will generate future economic benefits, and can
reliably measure the costs to complete the development. The capitalised costs include all costs directly attributable to the
development of the software. Internally developed software is stated at capitalised cost less accumulated amortisation
and impairment.

Subsequent expenditure on software assets is capitalised only when it increases the future economic benefits embodied
in the specific asset to which it relates. All other expenditure is expensed as incurred. Amortisation is recognised in
statement of comprehensive income on a straight-line basis over the estimated useful life of the software, from the date
that it is available for use. The estimated useful life of software is three years subject to annual reassessment.

2.11 Property and equipment

Recognition & measurement

Property and equipment comprise land and buildings and other properties owned by the Company.
Items of Property and equipment are carried at cost less accumulated depreciation and impairment losses except for land
and building which is carried at revalued amount.
Cost includes expenditure that is directly attributable to the acquisition of the asset.

Subsequent costs
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can
be measured reliably. All other repairs and maintenance costs are charged to the statement of comprehensive income
during the financial period in which they are incurred.

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

Subsequent measurement

All items of property and equipment except land and buildings are subsequently measured at cost less accumulated
depreciation and impairment losses.

Land and buildings

Land and buildings are subsequently carried at revalued amounts, being fair value at the date of revaluation less
subsequent accumulated depreciation and impairment losses, if any. They are valued on an open market basis by qualified
property valuers at each reporting date. Land is however not depreciated.

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

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

When Land and buildings are revalued, any accumulated depreciation at the date of the revaluation is eliminated against
the gross carrying amount of the asset and the net amount restated to the revalued amount.

Depreciation

Depreciation is calculated on property and equipment excluding land on the straight line basis to write down the cost of
each asset to its residual value over its estimated useful life.

Depreciation begins when an asset is available for use and ceases at the earlier of the date that the asset is erecognised or
classified as held for sale in accordance with IFRS 5.

The estimated useful lives for the current and comparative periods are as follows:
56 ANNUAL REPORT
& ACCOUNTS 2019

Company Information and Summary

of Significant Accounting Policies Continued
for the year ended 31 December 2019

Land - Not depreciated

Buildings - 50 years
Office equipment - 5 years
Computer equipment - 3 years
Furniture and fittings - 5 years
Motor vehicles - 4 years

Capital work in progress is not depreciated. The Company's capital work in progress relates to capital expenditure on
properties to be for the company's activities. Upon completion it is transferred to the relevant asset category.
Depreciation methods, useful lives and residual values are reassessed at each reporting date.

De-recognition

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

Re-classification to investment property

When the use of a property changes from owner-occupied to investment property, the property is re-measured to fair
value and reclassified accordingly.
Any gain arising on this re-measurement is recognised in statement of comprehensive income to the extent that it
reverses a previous impairment loss on the specific property with any remaining gain recognised in OCI and presented in
revaluation reserve.
Any loss is recognised in statement of comprehensive income. However, to the extent that an amount is included in
revaluation surplus for that property, the loss is recognised in OCI and reduces the revaluation surplus in equity.

2.12 Leases

The Company initially adopted IFRS 16 Leases from 1 January 2019.

IFRS 16 introduced a single, on-balance sheet accounting model for leases. As a result, the Company, as a lessee has
recognized the right-of-use assets representing its right to use the underlying assets. Lessors accounting remains similar
to previous accounting policies.
The major lease transaction wherein the Company is a lessee relates to the lease of Leadway Assurance's operating
branches in several locations.
The Company has applied IFRS 16 using the modified retrospective approach. Accordingly, the comparative information
presented for 2018 is not restated – i.e it is presented, as previously reported, under IAS 17 and related interpretations.
The details of the changes in accounting policies are disclosed below.

A. Definition of a lease

On transition to IFRS 16, the Company has elected to apply the practical expedient available not to reassess whether a
contract is or contains a lease. Accordingly, the definition of a lease in accordance with IAS 17 and IFRIC 4 will continue to
apply to those leases entered or modified before 1 January 2019.

Under IFRS 16, a contract is, or contains a lease if the contract conveys a right to control the use of an identified asset for a
period of time in exchange for consideration. The change in definition of a lease mainly relates to the concept of control.
IFRS 16 distinguishes between leases and service contracts on the basis of whether the use of an identified asset is
controlled by the customer. Control is considered to exist if the customer has:
* The right to obtain substantially all of the economic benefits from the use of an identified asset; and
* The right to direct the use of that asset.

The Company will apply the definition of a lease and related guidance set out in IFRS 16 to all lease contracts entered into
or modified on or after 1 January 2019 (whether it is a lessor or a lessee in the lease contract).
At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration
in the contract to each lease and non-lease component on the basis of their relative stand-alone prices. However, for leases
of properties in which it is a lessee, the Company has elected not to separate non-lease components and will instead
account for the lease and non-lease component as a single component.

B. As a Lessee

Leases, under which the Company possess a contract that conveys the right to control the use of an identified asset for a
period of time in exchange for consideration is disclosed in the Company's statement of financial position and recognized
as a leased asset.
ANNUAL REPORT
& ACCOUNTS 2019 57
Company Information and Summary
of Significant Accounting Policies Continued
for the year ended 31 December 2019

To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Company
assesses whether, throughout the period of use, it has both of the following:
(a) the right to obtain substantially all of the economic benefits from use of the identified asset, and
(b) the right to direct the use of the identified asset.
The Company recognizes expenses associated with these leases as an expense on straight line basis over the lease term.
The Company presents right-of-use assets as a separate class under ‘property and equipment’.

i. Significant accounting policies

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset
is initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses, and
adjusted for certain remeasurements of the lease liability.

The lease liability (where applicable) is initially measured at the present value of the lease payments that are not paid at
the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Company's incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as
the discount rate.

The lease liability (where applicable) is subsequently increased by the interest cost on the lease liability and decreased by
lease payment made. It is remeasured when there is a change in future lease payments arising from a change in an index or
rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate,
changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a
termination option is reasonably certain not to be exercised.

The Company has applied judgement to determine the lease term for some lease contracts in which it is a lessee that
include renewal options. The assessment of whether the Company is reasonably certain to exercise such options impacts
the lease term, which significantly affects the amount of lease liabilities and right-of-use assets recognized.

ii. Transition
Previously, the Company classified property leases as operating leases under IAS 17. These properties are Leadway
Assurance's operating branches/welcome centres
* At transition, right-of-use assets are measured at an amount equal to the lease liability (where applicable), adjusted by
the amount of any prepaid or accrued lease payments - the Company applied this approach to all other leases.

The Company used the following practical expedients when applying IFRS 16 to leases previously classified as operating
leases under IAS 17.
* Applied the exemption not to recognize right-of-use assets and liabilities (where applicable) for leases with less than 12
months of leaseterm.

* Excluded initial direct costs from measuring the right-of-use asset at the date of initial application.
* Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.

C. As a lessor
The company leases out it's investment property, including own property and right-of-use assets. The company has
classified these leases as operating leases. The company is not required to make any adjustments on transition to IFRS 16
for leases in which it acts as a lessor, except for a sub-lease.

D. Transition impact on financial statements

On transition to IFRS 16, the Company recognized additional right-of-use assets as summarized below:

In millions of Naira 1 January 2019

Operating lease presented as part of prepayments as at 31 December 2018. 88.15

Recognition exemption for leases of low-value -
Recognition exemption for short term leases -

Right-of-use asset recognized as at 1 January 2019 88.15

As a result of initially applying IFRS 16, in relation to the leases that were previously classified as operating leases, the
Company recognized N88.15 million of right-of-use assets.
Also, in relation to those leases under IFRS 16, the Company has recognized depreciation instead of operating lease
expense. During the year, the Company recognizes N56.78 million of depreciation charges.
58 ANNUAL REPORT
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Company Information and Summary

of Significant Accounting Policies Continued
for the year ended 31 December 2019

2.13 Classification of insurance contracts

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

The Company classifies financial guarantee contracts and account for these as insurance contracts in accordance with
IFRS 4.

(a) Types of insurance contracts

The Company classifies insurance contracts into life and general insurance contracts. The company also makes a
distinction between Short and Long term insurance contracts as follows:

Short Term Long Term

Most general
General Insurance contracts insurance contract Some insurance contracts under special risks
policies

Group life
Life Contracts insurance contract Insurance contract policies over human life
policies

(i) General insurance contract

These contracts are accident, casualty and property insurance contracts.

Accident and casualty insurance contracts protect the Company's customers against the risk of causing harm to third
parties as a result of their legitimate activities. Damages covered include both contractual and non-contractual events.
The typical protection offered is designed for employers who become legally liable to pay compensation to injured
employees (employers' liability) and for individual and business customers who become liable to pay compensation to a
third party for bodily harm or property damage (public liability).

Property insurance contracts mainly compensate the Company's customers for damage suffered to their properties or for
the value of property lost. Customers who undertake commercial activities on their premises could also receive
compensation for the loss of earnings caused by the inability to use the insured properties in their business activities.

general insurance contracts protects the Company's customers from the consequences of events (such as death or
disability) that would affect the ability of the customer or his/her dependants to maintain their current level of income.
Guaranteed benefits paid on occurrence of the specified insurance event are either fixed or linked to the extent of the
economic loss suffered by the insured. There are no maturity or surrender benefits.

(ii) Life insurance contract

These contracts insure events associated with human life (for example, death or survival) over a long duration.
-Indivdual and group life insurance contracts
Individual life contracts are usually long term insurance contracts and span over one year while the company life insurance
ANNUAL REPORT
& ACCOUNTS 2019 59
Company Information and Summary
of Significant Accounting Policies Continued
for the year ended 31 December 2019

contracts usually cover risk within one year. A liability for contractual benefits that are expected to be incurred in the future
when the premiums are recognised. The liability is determined as the sum of the expected discounted value of the benefit
payments and the future administration expenses that are directly related to the contract, less the expected discounted value
of the theoretical premiums that would be required to meet the benefits and administration expenses based on the valuation
assumptions used. The liability is based on assumptions as to mortality, persistency, maintenance expenses and investment
income that are established at the time the contract is issued.

-Annuity contracts
These contracts insure customers from consequences of events that would affect the ability of the customers to maintain
their current level of income. There are no maturity or surrender benefits. The annuity contracts are fixed annuity plans. Policy
holders make a lump sum payment recognised as part of premium in the period when the payment was made. Constant and
regular payments are made to annuitants based on terms and conditions agreed at the inception of the contract and
throughout the life of the annuitants. The annuity funds are invested in long tailed government bonds and reasonable money
markets instruments to meet up with the payment of monthly/quarterly annuity payments. The annuity funds liability is
actuarially determined based on assumptions as to mortality, persistency, maintenance expenses and investment income that
are established at the time the contract is issued.

(b) Insurance contracts- Recognition and measurement

(I) Premiums

Gross premiums comprise the premiums on insurance contracts entered into during the year, irrespective of whether they
relate in whole or in part to a later accounting period. This is recognised gross of commission expense.

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

Outward reinsurance premiums are accounted for in the same accounting period as the premiums for the related direct
insurance or reinsurance business assumed.

The earned portion of premiums received is recognized as revenue. Premiums are earned from the date of attachment of risk,
over the insurance period, based on the pattern of risk underwritten. Outward reinsurance premiums are recognized as an
expense in accordance with the pattern of risk reinsured.

(ii) Unearned premiums

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

(iii) Reinsurance

The Company cedes out insurance risks in the normal course of business for the purpose of limiting its net loss on policies
written. Premium ceded comprise written premiums ceded to reinsurers, adjusted for the reinsurers’ share of the movement
in the provision for the unearned premiums. Reinsurance arrangements do not relieve the Company from its direct obligations
to its policy holders.

Premium ceded, claims reimbursed and commission recovered are presented in the statement of comprehensive income and
statement of financial position separately from the gross amounts.

Reinsurance assets represent balances due from reinsurance contracts. Reinsurance liabilities are primarily premiums
payable for reinsurance contracts and are recognised at cost.

Reinsurance recoverables are estimated in manner consistent with the outstanding claims provision and claims incurred
associated with the reinsurer’s polices and are in accordance with the related insurance contract. They are measured at their
carrying amount less any impairment charges. Amounts recoverable under reinsurance contracts are assessed for impairment
at each Statement of financial position date. If there is objective evidence of impairment, the Company reduces the carrying
amount of its reinsurance assets to its recoverable amount and recognizes the impairment loss in the statement of
comprehensive income as a result of an event that occurred after its initial recognition, for which the Company may not be able
to recover all amounts due and the event has a reliably measurable impact on the amounts that the Company will receive from
the reinsurer.
60 ANNUAL REPORT
& ACCOUNTS 2019

Company Information and Summary

of Significant Accounting Policies Continued
for the year ended 31 December 2019

(iv) Commission income

Commissions are recognized on ceding business to the reassurer, and are credited to the statement of comprehensive income.

(v) Underwriting expenses

Underwriting expenses are made up of acquisition and maintenance expenses.

Underwriting expenses for insurance contracts and investment contracts are recognized as expense when incurred, with the
exception of acquisition costs which are recognized on a time apportionment basis in respect of risk.

(vi) Claims incurred

Claims incurred consist of claims and claims handling expenses paid during the financial year together with the movement in
the provision for outstanding claims. The provision for outstanding claims represent the Company’s estimate of the ultimate
cost of settling all claims incurred but unpaid at the balance sheet date whether reported or not. The provision includes an
allowance for claims management and handling expenses.

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

Reinsurance recoverables are recognized when the Company records the liability for the claims and are not netted off claims
expense but are presented separately in the statement of comprehensive income.

Claims incurred in respect of long-term insurance contracts especially pure life business and annuity contracts consist of
claims arising during the year including provision for policy holders’ liabilities. Outstanding claims on long-term insurance
contracts that have occurred at the balance sheet date and have been notified by the insured are carried at the claim amounts
advised.

(viii) Salvages

Some general insurance contracts permit the Company to sell (usually damaged) property acquired in the process of settling a
claim. The Company may also have the right to pursue third parties for payment of some or all costs of damages to its client's
property (i.e. subrogation right). Salvage recoveries are presented net of the claim expense.

2.14 Insurance contract liabilities

The recognition and measurement of Insurance contract liabilities is determined as follows:

(i) General Insurance business

(a) Reserves for unearned premium and unexpired risk

The reserve for unearned premium is calculated on a time apportionment basis in respect of risk accepted during the year with
the exception of construction all risk policies where the risk increases with term and progress on the project at hand and
marine policies where actuarial valuation is used to determine the liabilities. A provision for additional unexpired risk reserve is
recognised for an underwriting year where it is determined that the estimated cost of claims and expenses would exceed the
unearned premium reserve.

(b) Reserves for outstanding claims

The reserve for outstanding claims is maintained at the total amount of outstanding claims incurred plus claims incurred but
not reported ("IBNR") as at the reporting date. The IBNR is based on the liability adequacy test.
ANNUAL REPORT
& ACCOUNTS 2019 61
Company Information and Summary
of Significant Accounting Policies Continued
for the year ended 31 December 2019

(c) Liabilities Adequacy Test

The net liability for insurance contracts is tested annually for adequacy by actuarial valuation. This is carried out by discounting
current estimates of all future contractual cash flows and comparing this amount to the carrying value of the liability net of
deferred acquisition costs.

Where a shortfall is identified, an additional provision is made and the Company recognizes the deficiency in the statement of
comprehensive income for the year. The method of valuation and assumptions used, the cashflows considered and the
discounting and aggregation practices adopted have been set out in the following notes.

Reserving methodology and assumptions

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

Claims data was grouped into triangles by accident year or quarter and payment year or quarter. The choice between quarters
or years was based on the volume of data in each segment. Analysis was conducted by line of business.

Discounted inflation-adjusted basic chain ladder method

Historical claims paid were grouped into cohorts – representing when they were paid after their underwriting year. These
cohorts are called claim development years and the patterns were studied. The historical paid losses are projected to their
ultimate values for each underwriting year by calculating the loss development factors for each development year. The
ultimate claims are then derived using the loss development factors and the latest paid historical claims.

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

The resulting claims estimated is discounted to the valuation date using a discount factor raised by years as a result of applying
historical inflation rates to determine the appropriate discount rate to allow for a margin of prudence.

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

Assumptions underlying the Discounted Inflation-adjusted Basic Chain Ladder method

This method assumes the following:

- The future claims follows a trend pattern from the historical data.
- Payment patterns will be broadly similar in each accident year. Thus, the proportionate increases in the known
cumulative payments from one development year to the next is used to calculate the expected cumulative payments for
the future development periods.
- The run off period is six (6) years and hence the method assumes no more claims will be paid subsequently.

Expected loss ratio method

This method was adopted where the volume of data available is too small to be credible when using a statistical approach.
Special risk reserves were estimated based on this method. Under this method, the ultimate claims was obtained by assuming
loss ratio of 50%, where loss ratio is defined as claims incurred divided by earned premiums.
Outstanding claims is stated as amount estimated less paid claims.

(ii) Life business

These contracts insure events associated with human life (for example, death or survival) over a long duration. Premiums are
recognised as revenue when they become payable by the contract holder. Premiums are shown before deduction of
commission.

Benefits are recorded as an expense when they are incurred.

62 ANNUAL REPORT
& ACCOUNTS 2019

Company Information and Summary

of Significant Accounting Policies Continued
for the year ended 31 December 2019

A liability for contractual benefits that are expected to be incurred in the future is recorded when the premiums are recognised.
The liability is determined as the sum of the expected discounted value of the benefit payments and the future administration
expenses that are directly related to the contract, less the expected discounted value of the theoretical premiums that would
be required to meet the benefits and administration expenses based on the valuation assumptions used (the valuation
premiums). The liability is based on assumptions as to mortality, persistency, maintenance expenses and investment income
that are established at the time the contract is issued. A margin for adverse deviations is included in the assumptions.

Where insurance contracts have a single premium or a limited number of premium payments due over a significantly shorter
period than the period during which benefits are provided, the excess of the premiums payable over the valuation premiums is
deferred and recognised as income in line with the unexpired insurance risk of the contracts in force or, for annuities in force, in
line with the amount of future benefits expected to be paid.

The liabilities are recalculated at each balance sheet date using the assumptions established at inception of the contracts.

Actuarial valuation of the life fund is conducted annually to determine the net liabilities on the existing policies and the
adequacy of the assets representing the insurance funds as at the date of the valuation. All deficits arising therefore are
charged to the statement of comprehensive income while the surplus is appropriated to the shareholders and credited to the
statement of comprehensive income.

2.15 Provisions

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

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

2.16 Employee benefits

Short-term benefits

Short-term employee benefit obligations include wages, salaries and other benefits which the Company has a present
obligation to pay, as a result of employees’ services provided up to the balance sheet date. The accrual is calculated on an
undiscounted basis, using current salary rates.

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

Post employment benefits

The Company operates a defined contributory retirement scheme as stipulated in the Pension Reform Act 2004. Under the
defined contribution scheme, the Company pays fixed contributions of 10% to a separate entity – Pension Fund
Administrators; employees also pay 8% to the same entity. Once the contributions have been paid, the Company retains no
legal or constructive obligation to pay further contributions if the Fund does not hold enough assets to finance benefits
accruing under the retirement benefit plan. The Company’s obligations are recognised in the statement of comprehensive
income.

The Company introduced a defined contributory post employment benefit scheme during the year for its Executive Directors.
Under the scheme, the Company contributes fixed amounts as determined by the Board of Directors to their respective
Pension Fund Administrators. The contribution made in the year and for past service has been charged
to profit or loss.

Termination benefits

Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date or
whenever an employee accepts voluntary redundancy in exchange for these benefits. The Company recognizes termination
benefits when it is demonstrably committed either to terminate the employment of current employees according to a detailed
formal plan without possibility of withdrawal, or to provide termination benefits as a result of an offer made to encourage
voluntarily redundancy if it is probable that the offer will be accepted and the number of acceptances can be estimated.
Benefits falling due more than 12 months after balance sheet date are discounted to present value.
ANNUAL REPORT
& ACCOUNTS 2019 63
Company Information and Summary
of Significant Accounting Policies Continued
for the year ended 31 December 2019

2.17 Income tax

(i) Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year, and any adjustment to
tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of
the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax
rates enacted or substantively enacted at the reporting date and is assessed as follows:

- Company income tax is computed on taxable profits

- Tertiary education tax is computed on assessable profits
- National Information Technology Development Agency levy is computed on profit before tax
- Nigeria Police Trust Fund levy is computed on net profit (i.e. profit after deducting all expenses and taxes from revenue earned
by the company during the year).

Total amount of tax payable under CITA is determined based on the higher of two components namely Company Income Tax
(based on taxable income (or loss) for the year); and minimum tax. Taxes based on profit for the period are treated as income tax
in line with IAS 12.

Minimum tax
Minimum tax which is based on a gross amount is outside the scope of IAS 12 and therefore, are not presented as part of
income tax expense in the profit or loss. The Company is subject to the Finance Act (amendments made to Companies Income
Tax Act (CITA)). Total amount of tax payable under the new Finance Act shall not be less than 0.5% of the Company's gross
premium for general business and 0.5% of gross income for life business.

Where the minimum tax charge is higher than the Company Income Tax (CIT), a hybrid tax situation exists. In this situation, the
CIT is recognized in the income tax expense line in the profit or loss and the excess amount is presented above the income tax
line as Minimum tax.

(ii) Deferred taxation

Deferred taxation, which arises from timing differences in the recognition of items for accounting and tax purposes, is
calculated using the liability method. Deferred taxation is provided fully on timing differences, which are expected to reverse at
the rate of tax likely to be in force at the time of reversal. A deferred tax asset is recognized to the extent that it is probable that
future taxable profits will be available against which the associated unused tax losses and deductible temporary differences
can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be
realized.

Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a
transaction that is not a business combination and that affects neither accounting nor taxable profit, differences relating to
investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future and differences arising
from investment property measured at fair value whose carrying amount will be recovered through use. Deferred tax assets
are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the
related dividend is recognised.

2.18 Share capital and reserves

Share capital
The Company classifies ordinary shares and share premium as equity when there is no obligation to transfer cash or other
assets.
Incremental costs directly attributable to issue of shares are recognised as deductions from equity net of any tax effects.

Dividend on ordinary shares

Dividend distribution to the Company’s shareholders is recognised as a liability in the financial statements in the period in
which the dividends are approved by the Company’s shareholders. Dividends that are proposed but not yet declared are
disclosed in the notes to the financial statements. Dividends on the Company’s ordinary shares are recognised in equity in the
period in which they are paid or, if earlier, approved by the Company’s shareholders.

(a) Contingency reserves

The Company maintains contingency reserves in accordance with the provisions of the Insurance Act 2003 to cover
fluctuations in securities and variations in statistical estimates at the rate equal to the higher of 3% of total premium or 20% of
64 ANNUAL REPORT
& ACCOUNTS 2019

Company Information and Summary

of Significant Accounting Policies Continued
for the year ended 31 December 2019

the total profit after taxation until the reserve reaches the greater of minimum paid up capital or 50% of net premium for
general insurance business. Contingency reserve for life business is credited with the higher of 1% of gross premium and 10%
of profit after taxation. The insurance subsidiary in Cote d'Ivoire (Leadway Vie) maintains a Legal reserve in accordance with
the provisions of Article 346 of the OHADA Treaty on Commercial Companies and Economic Interest Groupings, a company is
expected to set aside 10% of its profit after tax, after payment of dividends minus carried forward losses as legal reserve. This
ceases to be mandatory when the amount so set aside reaches 20% of its stated capital.

(b) Assets revaluation reserves

Assets revaluation reserves represents the fair value differences on the revaluation of items of Property and equipment as at
the balance sheet date.

(c) Fair value reserves

Fair value reserves represents the fair value gains or losses on valuation of financial assets measured at fair value through
equity.

(d) Treasury shares

When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable
costs, is recognised as deduction from equity. Repurchased shares are classified as treasury shares and are presented in the
treasury shares reserve. When treasury shares are sold or reissued subsequently, the amount received is recognised as an
increase in equity and the resulting surplus or deifcit on the transaction is presented within share premium.

2.19 Earnings per share

The Company presents basic earnings per share for its ordinary shares. Basic earnings per share are calculated by dividing the
profit attributable to ordinary shareholders of the company by the number of shares outstanding during the year.

Diluted Earnings per share is determined by dividing the statement of comprehensive income attributable to ordinary
shareholders by the weighted average number of ordinary shares adjusted for the bonus shares issued.

2.20 Revenue recognition

Revenue comprises the fair value for services, net of value-added tax, after eliminating revenue within the Company. Revenue
is recognised as follows:

(i) Insurance contracts:

See accounting policy 2.13 b(i) for recognition of premium on insurance contracts.

(ii) Investment and other operating income

Investment income comprises interest income earned on short-term deposits, rental income and income earned on trading of
securities including all realised and unrealised fair value changes, interest income on loans and finance leases, dividends and
foreign exchange differences. Investment income is accounted for on an accrual basis.

Other operating income comprises of fee income and profit on disposal of property and equipment.

(iii) Dividend income

Dividend income for available for sale equities are recognised when the right to receive payment is established.

(iii) Rendering of Services

Revenue arising from asset management and other related services offered by the Company are recognised in the accounting
period in which the services are rendered.
Fee income consist primarily of investment management fees and pension administration fees. These fees are recognised in
the period in which the services are rendered.

2.21 Management expense

Management expenses are expenses other than claims and underwriting expenses. They include depreciation expenses and
other operating expenses. They are recognised on an accrual basis.
ANNUAL REPORT
& ACCOUNTS 2019 65
Company Information and Summary
of Significant Accounting Policies Continued
for the year ended 31 December 2019

2.22 Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in
profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be
drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable
that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised
over the period of the facility to which it relates.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or
expired.

2.23 Impairment of non-financial assets

The Company’s non-financial assets with carrying amounts other than investment property are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable
amount is estimated. For intangible assets that have indefinite useful lives or that are available for use, the recoverable amount
is estimated each year at the same time.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from
other assets and groups. Impairment losses are recognised in statement of comprehensive income.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.
66 ANNUAL REPORT
& ACCOUNTS 2019

Financial
Statements
67 | Company Statement of
Financial Position
68 | Company Statement of
Comprehensive Income
69 | Company Statement of
Changes in Equity
71 | Company Statement of
Cash Flows
72 | Notes to the Financial
Statements
ANNUAL REPORT
& ACCOUNTS 2019 67
Company Statement
of Financial Position
As at 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

Notes Company Company

31-Dec-19 31-Dec-18
ASSETS

Cash and cash equivalents 6 26,210,607 32,978,304

Trade receivables 7 102,459 395,585
Investment securities 8
- Financial assets at fair value
through profit or loss 8.1 238,425,827 156,009,761
- Available for sale financial assets 8.2 62,200,278 53,279,959
Reinsurance assets 9 39,038,453 43,688,887
Deferred acquisition cost 10 825,367 851,069
Other receivables and prepayments 11 2,132,561 1,417,602
Loans and advances 12 1,402,795 1,395,564
Property and equipment 13 4,412,066 3,428,095
Investment properties 14 17,199,024 16,414,443
Investment in subsidiaries 15 2,153,425 2,153,425
Intangible assets 17 162,448 255,339
Statutory deposits 18 500,000 500,000

TOTAL ASSETS 394,765,310 312,768,033

LIABILITIES

Trade payables 19 9,690,123 11,573,804

Current income tax liabilities 20 859,502 1,083,948
Other liabilities 21 4,539,823 5,627,973
Insurance contract liabilities 22 296,704,133 225,437,157
Investment contract liabilities 23 26,796,212 21,890,990
Deferred tax liabilities 16 1,883,284 1,883,284

TOTAL LIABILITIES 340,473,077 267,497,156

EQUITY

Issued and paid up share capital 24 10,000,000 10,000,000

Share premium 24 588,575 588,575
Retained earnings 24 24,297,458 18,361,621
Other reserves 24 19,406,200 16,320,681

TOTAL EQUITY ATTRIBUTABLE TO

OWNERS OF THE COMPANY 54,292,233 45,270,877

Non controlling interest 25 - -

TOTAL EQUITY 54,292,233 45,270,877

TOTAL EQUITY AND LIABILITIES 394,765,310 312,768,033

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS ON 5 March 2020 BY:

____________________________________ ______________________________________ ______________________________________

Mr. Tunde Hassan Odukale General (Rtd) Martin Luther Agwai Mr. Raphael Akomolede
FRC/2013/IODN/00000002040 FRC/2019/CDIR/00000019923 FRC/2013/ICAN/00000001912
Chief Executive Officer Chairman Ag. Chief Financial Officer

The notes are an integral part of these consolidated financial statements.

68 ANNUAL REPORT
& ACCOUNTS 2019

Company Statement
of Comprehensive Income
For the year ended 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

Notes Company Company

31-Dec-19 31-Dec-18

Gross premium written 26 90,596,192 87,519,720

Gross premium income 26 88,854,306 87,737,230

Reinsurance expenses 27 (17,956,199) (16,615,355)
Net premium income 70,898,107 71,121,875

Commission income 28 2,888,179 1,879,671

Underwriting income 73,786,286 73,001,546

Claims expenses 29 (38,474,501) (33,891,693)

Increase in annuity fund (73,125,802) (30,020,421)
Increase in individual life fund (993,480) (120,183)
Underwriting expenses 30 (8,128,704) (6,159,494)
Total underwriting expense (120,722,487) (70,191,791)

Total underwriting (loss)/profit (46,936,201) 2,809,755

Investment income 31 31,853,455 22,805,449

(Loss)/profit on investment contracts 31(a) 602,697 239,712
Net fair value gain/(loss) on assets at fair value 32 33,858,052 (11,809,671)
Other operating income 33 705,604 4,262,904
Gain on assets distributed 5 - 2,931,805
Employee benefit expenses 34 (3,196,138) (3,845,148)
Other operating expenses 35 (5,595,554) (6,004,804)
11,291,915 11,390,001

Net impairment (losses)/ write back 36 (5,450) 22,781

Profit before income tax 11,286,465 11,412,782

Income tax expense 37 (434,750) (2,229,461)

Profit for the year from continuing operations 10,851,715 9,183,321

Loss for the year from discontinued operations 5 - -

Profit for the year 10,851,715 9,183,321

Other comprehensive income:

Items that may be subsequently reclassified to the profit or
loss account:
Changes in available-for-sale financial
assets net of taxes 832,396 (2,855,554)
Net amount transferred to the income or (loss)
statement on sale of Available for sale Debt
instrument 275,836 110,070
Items within OCI that will not be reclassified to profit or
loss:
Gain on revaluation of properties and
equipment net of tax 61,409 91,776

Other comprehensive income for the year 1,169,641 (2,653,708)

Total comprehensive income for the year 12,021,356 6,529,613

Profit attributable to:

- Owners of the Company 10,851,715 9,183,321
- Non-controlling interest (Loss) - -

Profit for the year 10,851,715 9,183,321

Total Comprehensive income attributable to:

- Owners of the Company 12,021,356 6,529,613
- Non-controlling interest (Loss) - -

Total comprehensive income for the year 12,021,356 6,529,613

Total Comprehensive income attributable to equity

shareholders arises from:
- Continuing operations 12,021,356 6,529,613

Total comprehensive income for the year 12,021,356 6,529,613

Basic/Diluted - Earnings per share (kobo):
- From continuing operations 38 109 59
- From Discontinued operations 38 - -
- Total Comprehensive Income for the Year 38 109 59
ANNUAL REPORT
& ACCOUNTS 2019 69
Company Statement of
Changes in Equity
For the year ended 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

ATTRIBUTABLE TO OWNERS OF THE PARENT

Fair value
share Retained reserve on Asset
2019 Share capital premium earnings Available for Contingency revaluation Total
sale financial reserve reserve
assets

As at 1 January 2019 10,000,000 588,575 18,361,621 3,090,660 11,732,730 1,497,291 45,270,877

Profit for the year - - 10,851,715 - - - 10,851,715
Other comprehensive income
-
Net changes in fair value of AFS financial instruments - - 832,396 - - 832,396
Net amount transferred to Income statement - 275,836 - 275,836
Fair value on disposal of property and equipment - - - -

Fair value gain on property and equipment net of tax - - - - 61,409 61,409

Total comprehensive income for the year - - 10,851,715 1,108,232 - 61,409 12,021,356

Transaction with owners & directly in equity:

Transfer to contingency reserve - - (1,915,879) - 1,915,879 - -

Contingent consideration on investment in parent - - - - -
Contributions of equity net of transaction costs - - (3,000,000) -
Cash dividend paid to equity holders - - (3,000,000)

Total transactions with owners of equity - - (4,915,879) - 1,915,879 - (3,000,000)

As at 31 December 2019 10,000,000 588,575 24,297,457 4,198,892 13,648,609 1,558,700 54,292,233

 ANNUAL REPORT

70 & ACCOUNTS 2019

Separate Statement of
Changes in Equity
For the year ended 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

ATTRIBUTABLE TO OWNERS OF THE PARENT

Fair value
share Retained reserve on Asset
Company 2018 Share capital premium earnings Available for Contingency revaluation Total
sale financial reserve reserve
assets

As at 1 January 2018 4,682,450 4,433,748 20,795,498 5,836,144 9,877,208 1,435,515 47,060,563

Profit for the year - - 9,183,321 - - - 9,183,321
Other comprehensive income

Net changes in fair value of AFS financial instruments - - - (2,855,554) - - (2,855,554)

Net amount transferred to Income statement 110,070 110,070
Fair value transferred on disposal of property an
equipment - - 30,000 - (30,000) -

Fair value gain on property and equipment net of tax - - - - - 91,776 91,776

Total comprehensive income for the year - - 10,851,715 (2,745,484) - 61,409 6,529,613

Transaction with owners & directly in equity:

- - (1,855,522) - 1,855,522 - -
Transfer to contingency reserve - - (1,750,000)
Contingent consideration on investment in parent - - (1,750,000) - -
Cash dividend paid to equity holders
Issue of Bonus Shares 5,317,550 (3,845,173) (1,472,377) (3,637,494)
Distribution of Non - Insurance Subsidiaries (3,637,494)

Fair value remeasurement of non - insurance subsidiaries (2,931,805) (2,931,805)

Total transactions with owners of equity 5,317,550 (3,845,173) (11,647,198) - 1,855,522 - (8,319,299)

As at 31 December 2018 10,000,000 588,575 18,361,621 3,090,660 11,732,730 1,497,291 45,270,877

ANNUAL REPORT
& ACCOUNTS 2019 71
Company Statement
of Cash Flows
As at 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

Notes Company Company

31-Dec-19 31-Dec-18
Operating activities

Insurance premium received 27 82,530,537 77,964,613

Reinsurance premium paid 28 (18,022,240) (16,018,811)
Reinsurance commission received 30 2,888,179 1,879,671
Insurance benefits and claims paid 23 (41,956,098) (47,092,940)
Deposit received on investment contracts 23 9,856,703 7,954,712
Claims paid on investment contracts (6,747,694) (10,808,192)
Reinsurance claims received 2,895,711 15,533,139
Commission paid (2,933,299) (4,073,354)
Premium received in advance 6,102,664 7,349,516
Cash paid to insurance brokers and reinsurers (2,455,320) (1,783,496)
Cash paid to employees (4,157,432) (3,025,832)
Cash paid to external parties (8,032,207) (5,297,432)

19,969,505 22,581,594

Corporate tax paid 20 (659,196) (788,745)

Net cash used in operating activities 19,310,309 21,792,849

Cash flows from investing activities

Investment income received 28,588,662 23,367,307

Purchase of investment property 14 (576,704) (430,509)
Dividend received 1,322,094 724,382
Other income received 1,317,394 3,118,789
Proceeds on disposal of property and equipment 13,376 132,319
Purchase of Financial assets designated at fair value 8.1 (92,148,721) (53,566,530)
Purchase of available for sale financial asset 8.2 (43,766,851) (11,649,449)
Purchase of Held to Maturity Investment Securities - (22,981,328)
Payment for Loans and Receivables (508,760) (853,120)
Purchase of intangible assets 17 (60,708) (27,008)
Purchase of property and equipment 13 (1,390,236) (415,691)
Proceeds on disposal of Investment securities 83,556,638 44,198,619
Loans repayment received 616,160 370,072
Refund of deposit for shares to subsidiary - 246,422
Cash on acquisition -
Cash from subsidiaries distributed -
-
Proceeds on disposal of investment property - -

Net cash used in investing activities (23,037,654) (17,765,725)

Cash flows from financing activities

Dividend paid to equity holders (parents) (3,000,000) (1,750,000)

Net cash used in financing activities (3,000,000) (1,750,000)

Net increase in cash and cash equivalents (6,727,345) 2,277,124

Effect of exchange rate fluctuations on cash held (40,352) 1,706,164
Cash and cash equivalents at beginning of year 6 32,978,304 28,995,016

Cash and cash equivalent at end of year 6 26,210,607 32,978,304

72 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements
(All amounts in thousands of Nigerian Naira)

ENTERPRISE RISK MANAGEMENT (ERM) STATEMENT

3 Introduction

Leadway Assurance Company Limited (Leadway) applies an entity-wide approach to its risk
management process such that both existing and anticipated risks are identified upfront and
appropriate responses are applied to reduce the likelihood of the risk downside while exploiting
the opportunities inherent in the risks, thus creating value. The ERM framework has assisted all
levels of operation in achieving the company’s strategic objectives through systematic and
portfolio approach to evaluating and improving on effectiveness of risk management and
control.

Purpose
The general purpose of Leadway’s ERM Framework is to provide the internal stakeholders with
the guidance that ensures that all decisions made and activities conducted with regard to risk
management are in congruence with the entity's goals and business units' objectives.

The specific benefits we envisage gaining from our ERM framework are to:
-Protect and strengthen the company’s capital base such that risk acceptances are guided by our
Risk Appetite Framework and exposures are curtailed within tolerance limits.
-Give reasonable assurance to our policyholders and the regulators about our ability to pay
promptly, claims arising now and in the future.
-Communicate the risks being taken by the company to the investors and ensure that the
objectives of the organization are aligned with the expectations of capital providers.
-Reduce Leadway’s susceptibility to systemic risks generated by other sectors in the financial
system.
Make our capital requirements more risk-sensitive and to improve the alignment of our
company’s capital standards.
-Provide the means to promote and demonstrate best practices in governance and risk
management, and deliver more efficient use of capital.

Enterprise Risk Management Culture and Philosophy

-Our risk management philosophy and culture represent our shared values, attitude and practice
of how we consider risk in our day-to-day operations across all levels. As insurers, we anticipate
risks and in advance, respond appropriately.
-We regard every one of our employees as a risk manager and we all take individual and collective
ownership of the ERM responsibilities.
-We observe prudence in underwriting and limit risks to our appetite and set tolerances beyond
which we object to unguided exposures.
-We weigh the risk and reward inherent in our daily transactions and pursue those that support
value creation to all customers and shareholders.
-We have no tolerance for infractions of laws and regulations and we detest business
relationship with disreputable business entities and individuals.
-We have recorded visible improvement in our risk management strategy that has helped us
sustain our leadership position in the Nigerian insurance market and surpass stakeholders’
expectations.
-Leadway will continue to pursue value-based risk management objective that strives for an
optimal trade- off between risk and reward.

Risk Management Strategy

Our risk management methodology recognises that there cannot be total elimination of risk but
ANNUAL REPORT
& ACCOUNTS 2019 73
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

we are determined to reduce both the severity and probability of the occurrence of risk events
through appropriate responses. We have deployed an ERM policy that focuses on taking
enterprise-level view of interrelationship among various risks with a view to providing an
effective responses to managing the material risks that present the greatest threats to our
existence and operations as an insurance and investment company. In so doing we will, in the long
run, manage risks that are less significant.

We adopt the following strategies in managing risks in Leadway:

-i) Incorporate risk management principles into all functions and ensure an environment in which
the Board and senior management set the tone for effective controls.
-ii) Establish well defined risk management process for risk identification, assessment,
controlling, monitoring and reporting.
-iii) Entrench a structured and disciplined approach to assets balancing that will prevent
concentration of risk in any sector, industry, instrument, product or entity.
-iv) Formulation of policies and procedures that ensure that appropriate risk responses, as well
as other entity directives, internal policies and control procedures are carried out.
-v) Ensure good corporate governance and pursue zero tolerance for non-compliance with
regulatory compliance.

External Perspectives
Leadway has continued to be at the forefront of many industry initiatives that seek to ensure
setting and adhering to global best practice. This informed its involvement at the trade,
association and regulatory levels in setting the tone for compliance with legislations, regulations,
guidelines and standards designed for global ratings among insurers. We are conversant with the
regulatory direction and we (re)position our business to proactively respond to both local and
global insurance standards and regulations.

Risk Governance, Roles & Responsibilities

Our risk governance focuses on directing and controlling the management of risks within the
company by spelling out the roles and responsibilities for the board, management and
employees. The policy adopts the three-lines-of-defence model of risk management governance
that revolves around the Board, Risk Management Committee and the Audit Committee.

Risk Management Strategy

Our risk management methodology recognises that there cannot be total elimination of risk but
we are determined to reduce both the severity and probability of the occurrence of risk events
through appropriate responses.

Roles and Responsibilities

The Board
The board has the ultimate accountability for the risk and the related control environment and as
such, is responsible for the following:
-To approve the risk management framework, set the risk appetite/tolerance level and the risk
management strategy escalated to it, from time to time.
-To appraise the risk management process and the internal controls for effectiveness,
appropriateness and adequacy.
-To ensure that the company’s ERM Framework is subject to periodic audit by competent
personnel independent of the company’s risk management functions.
74 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial StatementsContinued
(All amounts in thousands of Nigerian Naira)

Board Risk & Technical committee

-To review risk management framework and policies and present same for board’s approval.
-Ensure that the ERM framework takes a portfolio view of risk and that strategy and objectives
formulation are predicated on sound understanding and assessment of major risks.
-To challenge risk information and examine the appropriateness of the judgments underlying the
setting of the company’s risk tolerance/limits.

Risk Management Committee

-To establish an appropriate structure that recognises the required level of independence
between the risk management officers and those engaged in the normal insurance operations.
-Put in place, a well-resourced risk management department with clearly defined responsibilities
and authorities for the company’s risk management activities.
-Develop risk management initiatives and regularly review the company’s methodology for risk
identification, assessment, measurement, mitigation and report escalation.
-Design and document risk policies and procedures that reflect changes in entity-risk portfolio
and ensure their enterprise-wide implementation.

Business Units
Many of the operational risks reside in the business units and risk owners/champions in these
units have responsibilities for risk management in the respective risks. Specifically, business units
are responsible for the following:
-To carry out a monthly review of risks profile in the department/unit in compliance with the
entity’s risk policies and procedures.
-Apply appropriate control measures to manage identified risks and solicit the involvement of the
Enterprise Risk Management Division in the escalation of material risks to Risk Management
Committee.
-Be involved in all activities designed to propagate risk management culture within the company
and in building firewalls against emerging exposures that may affect the achievement of the
company’s objectives.
-Produce risk management reports input for consolidation into the overall report repository
domiciled in the Enterprise Risk Management Division.
-Provide information towards the development of new approaches to risk management in its
domain and collaborate with Enterprise Risk Management Division to prepare appropriate risk
mitigation plans for the unit.

Enterprise Risk Management Division

-Responsible for facilitation and co-ordination of risk management activities across the company.
-Provision of technical assistance and guidance to business units. It will be responsible for raising
awareness of risk management across the company.
-Reviews and analyses the company’s business and investment proposals to ensure that risks
have been adequately identified and proper mitigating factors put in place.
-Develop Key Risk Indicators (KRIs) for monitoring key drivers associated with identified major
risks.
-Prepare for the Risk Management Committee’s review, necessary exception reports with
recommendations for improvement of the entire risk management and reporting system.
-Monitor compliance with the company’s ERM policies/procedures on risk limits and assess the
impact regulatory requirements will have on the company’s operations.

Internal Audit
-To adopt a risk-based approach to planning and executing the internal audit process/activities by
directing internal auditing resources at those areas most important to the organization.
-Evaluate the adequacy and effectiveness of controls encompassing the organization’s
ANNUAL REPORT
& ACCOUNTS 2019 75
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

governance, operations, and information systems.

-Develop internal audit plans that identify and assess risks relevant to the activity under review
and ensure that the internal auditing objectives reflect the results of the risk assessment.
-To contribute to the effectiveness of enterprise risk management, by participating in separate
evaluations of internal controls and the ERM programme, and recommending improvements.
-To provide advice in the design and improvement of control systems and risk mitigation
strategies.
-To challenge the basis of management’s risk assessments and evaluate the adequacy and
effectiveness of risk treatment strategies.

Risk Landscape
The company’s risk landscape comprises of the core risks around our business operations and
other risks that are external to them. The key risk classifications that have been reported include:

i) Insurance Risk – the risk of loss as a result of improper pricing or/and inadequate reserving.
The risk may arise as the insurers are exposed to the risk of timing and expectation of claims and
benefit payments. The risk is miptigated through a strong reinsurance programme and effective
underwriting strategy that diversifies through appropriate mix.

ii) Operational Risk – the company is exposed to risks associated with process inefficiencies,
system failure, human errors and external events. In mitigating the risk we deployed strategies
for mining operational loss data and institute effective internal controls to minimise both the
occurrence and severity of operational risk.

iii) Market/Financial Risk – the risk of volatility in the financial market that can expose our
income streams to market fluctuations, and assets value being jeopardised due to falling stock
prices.

iv) Regulatory/Compliance Risk – the risk of loss arising from regulatory infractions that attract
fines and penalties. The company deploys appropriate trainings aimed at achieving the status of
‘most significantly- compliant insurer’. The company Governance and Compliance Policies are
periodically audited.

v) Competition Risk: the risk of losing business and market share arising from voluntary
customer attrition, price war, inefficient work process and poor service delivery. Our company is
able to manage this risk through efficient, technology driven premium service delivery and
prompt resolution of customer complaints that has enabled the company sustain its market
leadership status.

vi) Emerging Risk – these are risks that are developing and/or existing risks that are changing to
develop other dependencies. We have envisaged that country risk and product risks will become
noticeable in the ensuing periods due to the forthcoming elections, the company’s strategic
expansion and business growth. We have scanned the environment and have started putting in
place, appropriate structures to mitigate against possible crystalisation of these potential risks.

3.1 Capital Management Policies, Objectives and Approach

Approach to capital management

Leadway seeks to optimise the structure and sources of capital to ensure that it consistently
maximises returns to the shareholders and policyholders.
76 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

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

The Company's primary source of capital includes its equity shareholders’ funds. Leadway also
utilizes adequate and efficient reinsurance arrangements to protect shareholders' funds by reducing
the need for further funding following unfavorable events such as catastrophes or large claims
through treaty and facultative reinsurance arrangements.

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

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

The Company’s objectives with respect to capital management are to maintain a capital base that is
structured to exceed regulatory requirement and to decide on the efficient use of capital by assessing
the return on capital allocated to the various classes of business and/or products.

Company Company
31-Dec-19 31-Dec-18
N’000 N’000

Maximum Regulatory Capital 5,000,000 5,000,000

Maximum authorized capital 10,000,000 10,000,000
Paid up share capital 10,000,000 10,000,000

The Company has different requirements depending on the specific operations which it engages in.
The Company's main business is Insurance risk underwriting. The insurance business is divided into
life and general insurance business. Note 24a shows the authorized and paid up capital for the life and
general insurance businesses.

Insurance industry regulator measures the financial strength of general insurers using a solvency
margin model. This test compares insurers’ capital against the risk profile. Section 24 (1) of the
Insurance Act, 2003 requires that an insurer shall in respect of its business other than its life
insurance business, maintain at all times a margin of solvency being the excess of the value of its
admissible assets in Nigeria over its liabilities in Nigeria. The solvency margin shall not be less than 15
percent of the gross premium income less reinsurance premiums paid out during the year under
review or the minimum paid-up capital which ever is greater. During the year, the Company has
complied with this capital requirement. The regulator has the authority to request more extensive
reporting and can place restrictions on the Company’s operations if the Company falls below this
requirement as deemed necessary.
ANNUAL REPORT
& ACCOUNTS 2019 77
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Effective December 2020, the industry's regulatory body (NAICOM) has increased the minimum
required regulatory capital for insurance companies as shown below;

1. Life Insurers: Increased to N8 billion from N2 billion

2. General Insurers: Increased to N10 billion from N3 billion

This implies that composite insurers like Leadway Assurance will now have its minimum required
regulatory capital increased to N18 billion from its current N5 billion.

We will comply with the above listed requirement as a composite insurer.

 78 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

The company's solvency margin as at 31 December 2019 is as follows:

December 2019 December 2018

Notes TOTAL ADMISSIBLE INADMISSIBLE TOTAL ADMISSIBLE INADMISSIBLE
ASSETS N'000 N'000 N'000 N'000 N'000 N'000
Cash and Cash Equivalents 6 26,210,607 21,640,794 4,569,813 32,978,304 32,156,991 821,313
Trade Receivables 7 102,459 102,459 - 395,585 395,585 -
Investment Securities 8 300,626,105 300,626,105 - 209,289,720 209,289,720 -
Reinsurance Asset 9 39,038,453 39,038,453 - 43,688,887 43,688,887 -
Deferred Acquisition Cost 10 825,367 825,367 - 851,069 851,069 -

Other Receivables and Prepayments 11 2,132,561 - 2,132,561 1,417,602 - 1,417,602

Loans and Advances 12 1,402,795 69,827 1,332,968 1,395,564 1,395,564 -
Intangible assets 17 162,448 162,448 - 255,339 255,339 -
Property & Equipment 13 4,412,066 4,412,066 - 3,428,095 3,428,095 -
Investment Properties 14 17,199,024 15,757,091 1,441,933 16,414,443 7,040,510 9,373,933
Investment in Subsidiaries 15 2,153,425 2,153,425 - 2,153,425 2,153,425 -
Statutory Deposit 18 500,000 500,000 - 500,000 500,000 -
Total Assets 394,765,310 385,288,035 9,477,275 312,768,033 301,155,185 11,612,848

December 2019 December 2018

TOTAL ADMISSIBLE INADMISSIBLE TOTAL ADMISSIBLE INADMISSIBLE
LIABILITIES N'000 N'000 N'000 N'000 N'000 N'000
Trade payables 19 9,690,123 9,690,123 - 2,564,194 2,564,194 -
Current Income Tax Liabilities 20 859,502 859,502 - 1,083,948 1,083,948 -
Other Liabilities 21 4,539,823 4,539,823 - 14,637,584 14,637,584 -
Insurance Contract Liabilities 22 296,704,133 296,704,133 - 225,437,157 225,437,157 -
Investment Contract Liabilities 23 26,796,212 26,796,212 - 21,890,990 21,890,990 -
Deffered Tax Liabilities 16 1,883,284 - 1,883,284 1,883,284 - 1,883,284

Total Liabilities 340,473,077 338,589,793 1,883,284 267,497,157 265,613,873 1,883,284

Excess of admissible assets

over liabilities 46,698,242 35,541,312

Test I Gross Premium 88,854,306 87,737,230

Less: Reinsurance expense (17,956,199) (16,615,355)
Net premium 70,898,107 71,121,875

15% thereof 10,634,716 10,668,281

Test II Minimum paid-up capital 5,000,000 5,000,000

The higher thereof:

SURPLUS OF SOLVENCY 36,063,526 24,873,031

Solvency ratio 439% 333%

ANNUAL REPORT
& ACCOUNTS 2019 79
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

3.2 Asset and liability management

The Companyis exposed to a range of financial risks through its financial assets,
financial liabilities, reinsurance assets and insurance liabilities. In particular, the key
financial risk is that in the long-term its investment proceeds are not sufficient to fund
the obligations arising from its insurance and investment contracts. The most
important components of this financial risk are interest rate risk, equity price risk,
foreign currency risk and credit risk.

These risks arise from open positions in interest rate, currency and equity products, all
of which are exposed to general and specific market movements. The risks that the
Company primarily faces due to the nature of its investments and liabilities are interest
rate risk and equity price risk. The Company manages these positions within an ALM
framework that has been developed to achieve long term investment returns in excess
of its obligations under insurance and investment contracts. Within the ALM
framework, the Company periodically produces reports at portfolio, legal entity and
asset and liability class level that are circulated to the Company’s key management
personnel. The principal technique of the Company’s ALM is to match assets to the
liabilities arising from insurance and investment contracts by reference to the type of
benefits payable to contract holders. For each distinct class of liabilities, a separate
portfolio of assets is maintained. The Company has not changed the processes used to
manage its risks from previous periods.

The Company’s ALM is integrated with the management of the financial risks
associated with the Company’s other classes of financial assets and liabilities not
directly associated with insurance and investment liabilities. The notes below explain
how financial risks are managed using the categories utilized in the Company's ALM
framework.
 80 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Asset Cover 31-Dec-19 31-Dec-18

Item Form Current Period Prior % Change
Period

Gross Insurance Funds 323,500,345 247,316,422 31%

Less
Reinsurance Receivables
1 Reinsurance
2 Reinsurance expenses prepaid 3,193,766 3,127,725 2%
3 Reinsurers share of Claims expense paid 492,135 68,751 616%
4 Reinsurers share of Claims expense 35,352,553 40,492,412 -13%
outststanding
5 Reinsurers share of Incurred but not reported
claims
Net Insurance Funds 284,461,892 203,627,535 40%
Admissible Assets
1 Cash and Cash Equivalents 5,428,864 5,644,868 -4%
2 Treasury bills and Government Bonds 265,259,821 177,769,334 32%
3 Placement with Financial Insititutions 20,781,743 27,333,436 -24%
4 Corporate Bonds & Debenture 11,492,170 8,691,659 49%
5 Ordinary & Preference Shares 23,874,114 22,828,727 5%
6 Agency Loan 45,699 31,550 45%
7 Loan to Policy holders 378,220 288,000 31%
8 Other Loans & Investments 8,185,951 6,677,050 23%
9 Investment in subsidiaries, - -
10 Investment in Associates - -
11 Investment in jointly controlled entities
12 Investment Properties 15,757,091 7,040,510 124%
Total Admissible Assets 351,203,673 256,305,134 37%
SURPLUS(DEFICIT ) IN ASSETS COVER 66,741,781 52,677,600 27%
ANNUAL REPORT
& ACCOUNTS 2019 81
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

3.2 ASSET AND LIABILITY MANAGEMENT

(a) HYPOTHECATION OF ASSETS
As at 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

COMPANY

General Insurance Life

Policy
holder’s
Shareholder's Policy Others Shareholder's Deposit Annuity Fund Fund Others
fund holder's Fund fund Admin. Fund (LIFE) Total

TOTAL 30,709,225 66,644,120 12,163,663 23,583,009 26,796,212 220,634,739 9,425,272 5,541,594 395,497,834
INVESTMENTS:

Fixed Assets:
Real Estate - 4,065,450 - 12,870,374 - - 263,200 - 17,199,024
Office Equipments 137,583 - - 105,685 - - - 243,268
Motor Vehicles 280,110 - - 210,683 - - - 490,793
Furniture and Fittings 6,684 - - 21,546 - - - 28,230
Intangible Assets 104,356 - - 58,093 - - - 162,449
Others Investments: - - - - - -
Commercial loans 135,829 - - 145,519 656,238 - - - 937,586
Loans to Policy holders - - - - 378,220 - - 378,220
Statutory Deposit 300,000 - - 200,000 - - - 500,000
Treasury Bills - 444,680 - 132,540 3,181,827 740,953 678,617 - 5,178,618
Government Bonds 6,466,736 17,380,982 - 1,573,459 20,684,406 204,626,724 6,535,216 2,941,270 260,208,794
Corporate bonds 5,813,670 645,963 - 267,838 532,524 3,856,275 248,309 11,364,580
Quoted Securities 4,159,872 2,773,248 - 1,048,148 866,982 8,638,771 705,675 - 18,192,695
Unquoted Securities 648,153 324,077 2,268,538 2,414,133 - - 26,516 - 5,681,417
Bank Placements 3,492,550 13,970,198 - 1,075,685 218,598 1,662,974 361,738 - 20,781,743
Bank and Cash Balances 3,846,200 - 268,252 189,517 1,109,041 15,853 - 5,428,863
Related Companies Securities - - - 2,153,425 - - - 2,153,425
Related Companies Loans - - - - - - - - -
Other assets (see "A" below) 9,076,151 23,193,322 9,982,656 1,037,852 87,900 - 590,148 2,600,099 46,568,128
TOTAL 30,621,694 66,644,120 12,251,194 23,583,232 26,796,212 220,634,739 9,425,274 5,541,369 395,497,833

OTHER DETAILS (A)

GENERAL LIFE COMPANY

BUSINESS BUSINESS
Intangible assets
Other PPE (L &B, WIP, ROUA) 2,068,776 1,580,999 3,649,775

Prepaid Reinsurance & Recoverables 38,674,736 363,717 39,038,453

Deferred Acquisition Expenses 825,367 - 825,367
Premium Debtors 97,595 4,864 102,459
Deferred Tax Assets - - -
Other assets: (Staff loans ,
prepayments, and sundry debtors) 585,655 2,366,419 2,952,074
TOTAL 42,252,129 4,315,999 46,568,128
82 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

3.3 Financial risk management

The Company is exposed to a range of financial risks through its financial instrument,
reinsurance assets and insurance liabilities. The key financial risk is that in the long term
its investments proceeds are not sufficient to fund the obligations arising from its
insurance and investment contracts. The most important components of the financial
risks are:
- Credit risks
- Liquidity risks
- Market risks

3.3.1 Credit risks

Credit risks arise from the default of a counterparty to fulfil its on and/or off- balance
sheet contractual obligations. Exposure to this risk results from financial transactions
with a counterparty including issuer, debtor, investee, borrower, broker, policy holder,
reinsurer or guarantor.

The Company has policies in place to mitigate its credit risks.

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

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

(ii) The Company’s set guidelines determine when to obtain collateral and guarantees. The
Company also maintains strict control limits by amount and terms on financial assets.
The amounts subject to credit risk are limited to the fair value of ‘in the money’ financial
assets against which the Company either obtains collateral from counterparties or
requires margin deposits. Collateral may be sold or repledged by the Company and is
repayable if the contract terminates or the contract’s fair value falls.

(iii) Reinsurance is placed with counterparties that have a good credit rating and
concentration of risk is avoided by following policy guidelines in respect of
counterparties’ limits that are set each year by the management and are subject to
regular reviews. At each reporting date, management performs an assessment of
creditworthiness of reinsurers and updates the reinsurance purchase strategy,
ascertaining suitable allowance for impairment.

(iv) The Company sets the maximum amounts and limits that may be advanced to
corporate counterparties by reference to their long–term credit ratings and
ANNUAL REPORT
& ACCOUNTS 2019 83
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

worthiness.

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

(vi) In evaluating credit risk (impairment), the company determines impairment on loans
that are not specifically impaired using a model in line with the requirements of IFRS as
follows:

Impairment = EAD * PD * LGD

the parameters are defined as follows:

1. Probability of default (PD) : This is the probability that a counterparty will defualt on
an exisiting commitment usually over a 12 months period
2. Loss given default (LGD) : This is the portion of a loan or receivable determined to be
irrecoverable, our methods considers prior period experience, other qualitative factors
and future economic prospect
3. Exposure at default (EAD): This represents the amount that is due or outstanding at
the time of default.
84 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

3.3.1.1 Maximum exposure to credit risk

Note Company Company

31-Dec-19 31-Dec-18
Cash and cash equivalents (See note 1 below) 6 26,204,721 32,975,063
Trade receivables 7 102,459 395,585
Investment securities:
- Fair value through profit or loss (See note 2 below) 8.1 235,720,995 153,254,493
- Available for sale 8.2 41,030,996 33,206,500
Reinsurance Assets (See note 3 below) 9 35,844,688 40,561,162

Other receivables (See note 4 below) 11 760,069 723,613

Loans and advances 12 1,402,795 1,395,564

Statutory deposits 18 500,000 500,000

Total assets exposed to credit risk 341,566,723 263,011,980

1. Cash and cash equivalents excludes the balance representing cash in hand which is not exposed
to credit risk.

2. Assets measured at fair value through profit or loss and Available for sale financial instrument
do not include the balance of equity securities in these classes of asset as equity securities are
not exposed to credit risk.

3. Reinsurance Assets only includes amount recoverable on claims reported (excluding IBNR) and
amount due from reinsurers. The balance on prepaid reinsurance is excluded from this analysis.

4. Other receivables excludes prepayments and other non financial assets. (see note 11)

The Company further manages its exposure to credit risk through counterparty risk via
established limits as approved by the Board. These limits are determined based on credit ratings
of the counterparty amongst other factors. All fixed income investments are measured for
performance on a quarterly basis and monitored by management on a monthly basis.
ANNUAL REPORT
& ACCOUNTS 2019 85
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

3.3.1.2 Counterparty risk

(a) Cash and cash equivalent
The company and company's counterparty exposure of its cash and cash equivalent is represented
below:

Counterparty Company Company

31-Dec-19 31-Dec-18
National banks 19,783,476 30,296,857
Foreign banks 4,569,813 821,313
Investment house 1,851,432 1,856,893
26,204,721 32,975,063

Counterparty Company Company

31-Dec-19 31-Dec-18
National banks 76% 92%
Foreign banks 17% 2%
Investment house 7% 6%
100% 100%
(b) Investment securities
The company and company's counterparty exposure of its investment securities is represented below:

Counterparty Company Company

31-Dec-19 31-Dec-18
Federal Government of Nigeria 264,792,768 176,924,863
State Government in Nigeria 868,794 938,363
Corporates with acceptable risk ratings 11,090,429 8,597,767
276,751,991 186,460,993

(c) Trade receivables

Credit risk exposure to trade receivables arises from the 30 days window given by
NAICOM in the "No Premium No Cover" policy. This give the brokers latitude to withhold
premium collected from the insured for 30 days before remittance. However, they are
expected to issue their credit note and remit the premium on or before the expiration of
the 30 days grace period. Brokers who fail to remit are reported on a quarterly basis to
NAICOM and are subject to the downgrading process in line with the Company's policy.
The Company's risk exposure to credit risk is low as the receipt of insurance premium from
the insured is a pre-condition for the issuance of insurance cover.

(d) Loans and advances

Credit risk exposure to direct business is low as the Company requires debtors to provide
guarantees before inception of insurance policies. The Company's exposure to credit risk
arising from brokered business is relatively moderate and the risk is managed by the
Company's internal rating model for brokers. Our credit risk internal rating model is
guided by several weighted parameters which determine the categorization of brokers
the Company transacts businesses with.

(e) Reinsurance receivable

Reinsurance contract is executed only with reinsurers with a minimum acceptable credit
rating. Management monitors the credit worthiness of reinsurers by reviewing their
annual financial statements and through ongoing communications. Reinsurance treaties
are reviewed annually by management prior to renewal of reinsurance contracts.
86 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Company
2019

AA+/AA- A+/A- BB+/BB- UNRATED TOTAL

Neither past due nor impaired

Cash and cash equivalents (excl. cash

on hand) 6 7,754,023 13,432,901 4,380,750 637,047 26,204,721
Investment securities - FVTPL (excl.
equity) 8.1 1,847,477 1,573,446 232,300,072 - 235,720,995
Investment securities - AFS (excl.
equity) 8.2 54,380 6,524,338 34,324,688 127,590 41,030,996
Trade receivables 7 - - - 102,459 102,459
Loans and advances 12 - - - 1,295,437 1,295,437
Other receivables - financial assets 11 - - - 760,069 760,069
Statutory deposits 18 - - 500,000 - 500,000
Reinsurance assets (Due from
reinsurers) 9 - - - 35,844,688 35,844,688

Past due but not impaired

Loans and advances 107,358 107,358

Past due and impaired

Loans and advances - - - 356,457 356,457

Less specific impairment on past

due and impaired:
Loans and advances - - - (324,754) (324,754)
9,655,880 21,530,685 271,505,510 38,906,351 341,598,426

Company
2018

AA+/AA- A+/A- BB+/BB- UNRATED TOTAL

Neither past due nor impaired

Cash and cash equivalents (excl. cash

on hand) 6 10,568,316 19,035,155 920,006 2,451,586 32,975,063
Investment securities - FVTPL (excl.
equity) 8.1 - 1,645,709 151,394,875 213,908 153,254,493
Investment securities - AFS (excl. 8.2 1,202,099 31,879,954 124,448 33,206,500
Trade receivables 7 - - - 395,585 395,585
Loans and advances 12 - - - 1,155,822 1,155,822
Other receivables - financial assets 11 - - - 723,613 723,613
Statutory deposits 18 - - 500,000 - 500,000
Reinsurance assets (Due from
reinsurers) - - - 40,561,162 40,561,162

Past due but not impaired

Loans and advances - - 239,742 239,742

Past due and impaired

Loans and advances - - - 351,008 351,008

Less specific impairment on past

due and impaired:
Loans and advances - - - (308,842) (308,842)

10,568,316 21,882,963 184,694,835 45,908,031 263,054,146

ANNUAL REPORT
& ACCOUNTS 2019 87
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Global Corporate Rating (GCR)'s rating symbols and Definitions

AAA Extremely strong financial security characteristics and is the highest FSR assigned by GCR.
AA+ Has very strong financial security characteristics, differing only slightly from those rated higher.
AA
AA-
A+ Has strong financial security characteristics, but is somewhat more likely to be affected by adverse
A business conditions than assurers with higher ratings.
A-
BBB+ Has good financial security characteristics, but is much more likely to be affected by adverse business
BBB conditions than assurers with higher ratings.
BBB-
BB+ Has vulnerable financial security characteristics, which might outweigh its strengths. The ability of
these companies to discharge obligations is not well safeguarded in the future.

Company Company
31-Dec-19 31-Dec-18
Past due and impaired
0 - 90 days 324,754 203,855
90 - 180 days - -
181 days and above - -
324,754 203,855
88 ANNUAL REPORT
& ACCOUNTES 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Concentration of credit risk

Financial Manufacturing Public sector Others Total

institution /telecom
Company 2019

Cash and cash equivalents 6 26,204,721 - - - 26,204,721

Investment securities - FVTPL (excl.
equity) 8.1 3,080,604 - 230,867,769 1,772,622 235,720,995
Investment securities - AFS (excl.
equity) 8.2 4,354,119 - 32,034,441 4,642,436 41,030,996
Investment securities - HTM 0 - -
Trade receivable 7 - - - 102,459 102,459
Loans and advances 12 728,094 - 674,701 1,402,795
Other receivables - financial assets 11 - - - 760,069 760,069
Statutory deposits 18 500,000 - - - 500,000
Reinsurance Assets 9 35,844,688 - - - 35,844,688
Total 70,712,226 - 262,902,210 7,952,287 341,566,723

Company 2018 Financial Manufacturing Public sector Others Total

institution /telecom

Cash and cash equivalents 6 32,975,063 - - - 32,975,063

Investment securities - FVTPL (excl.
equity) 8.1 1,240,317 - 151,369,243 644,933 153,254,493
Investment securities - AFS (excl.
equity) 8.2 5,315,614 - 27,451,035 439,851 33,206,500
Trade receivable 7 - - - 395,585 395,585
Loans and advances 12 514,162 - 881,402 1,395,564
Other receivables - financial assets 11 - - - 723,613 723,613
Statutory deposits 18 500,000 - - - 500,000
Reinsurance Assets 9 40,561,162 - - - 40,561,162
Total 81,106,318 - 178,820,278 3,085,384 263,011,980
ANNUAL REPORT
& ACCOUNTS 2019 89
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

3.3.2 Liquidity risks

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations
associated with financial instruments. In respect of catastrophic events there is also a
liquidity risk associated with the timing differences between gross cash out–flows and
expected reinsurance recoveries.

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

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

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

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

The table that follows summarizes the maturity profile of the non–derivative financial
assets and financial liabilities of the Company based on remaining undiscounted
contractual obligations, including interest payable.

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

Repayments which are subject to notice are treated as if notice were to be given
immediately.
90 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Maturity analysis (contractual undiscounted cash flow basis for non–derivatives)

Using the behavioural pattern of our funding sources over time, the Company's expected cash flows on some financial assets and
liabilities to vary significantly from the contractual cash flows. As part of management of liquidity risk arising from financial liabilities, the
Company maintains a portfolio of highly marketable and diverse assets that can be easily liquidated in the event of an unforeseen
interruption of cash flow.

The table below shows the undiscounted cash flow on the Company's financial assets and liabilities and on the basis of the earliest
possible contractual maturity. The gross nominal inflow/outflow disclosed in the table is the contractual, undiscounted cash flows on
the financial assets and liabilities. Whilst the table below have been prepared based on the contractual maturities, the maturity profile
based on the behavioural pattern of the assets and liabilities observed over a very long period (five years) presents management with a
reliable basis to manage the inherent liquidity risks.

Company Contractual maturities of financial assets and liabilities

31 December 2019 Note Carrying Gross nominal 0-3 months 3-6 months 6-12 months 1-5 years Over 5 years
amount
Assets
Cash and cash equivalents 6 26,210,607 26,280,983 26,280,983 - - - -
Trade receivables 7 102,459 102,459 102,459 - - - -
Investment securities - FVTPL 8.1 238,425,827 675,557,975 8,997,846 7,342,519 13,804,130 123,872,622 521,540,858
Investment securities - Available for 8.2 62,200,278 112,852,062 9,564,554 3,254,650 12,695,587 25,328,829 62,026,443
sale
Reinsurance assets (Excl. prepaid 9 35,844,688 35,844,688 21,381,607 14,463,081 - - -
reinsurance)
Other receivables - financial assets 11 760,069 760,069 760,069 - - - -
Loans and advances 12 1,402,795 1,615,850 795,346 117,193 233,961 469,350 -
Statutory deposit 18 500,000 500,000 - - - - 500,000

Total financial assets 365,446,723 853,514,086 67,864,864 25,177,443 26,733,678 149,670,801 584,067,301

Trade payables 19 9,690,123 9,690,123 9,690,123 9,690,123 - - -

Other liabilities - financial liabilities 21 2,822,414 2,996,236 1,815,669 1,180,567 - - -
Insurance contract liabilities (excl.
IBNR and unearned premium)) 22 271,787,023 651,683,566 54,583,499 7,318,604 14,633,950 116,424,810 458,722,703
Investment contract liabilities 23 26,796,212 26,796,212 1,321,951 682,032 1,079,130 10,811,387 12,901,713

Total financial liabilities 311,095,772 691,166,137 67,411,242 9,181,203 15,713,080 127,236,197 471,624,417

Gap 54,350,951 162,347,949 453,622 15,996,240 11,020,598 22,434,604 112,442,885

ANNUAL REPORT
& ACCOUNTS 2019 91
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Contractual maturities of financial assets and liabilities

Company

31 December 2018 Notes Carrying Gross nominal 0-3 months 3-6 months 6-12 months 1-5 years Over 5 years
amount

Cash and cash equivalents 6 32,978,304 35,136,623 33,221,646 1,914,977 - - -

Trade receivables 7 395,585 357,441 214,465 142,976 - - -
Investment securities - FVTPL 8.1 156,009,761 464,320,161 7,096,944 3,723,570 10,967,077 92,332,734 350,199,836
Investment securities - Available for 8.2 53,279,959 58,867,116 1,139,039 418,249 1,830,568 25,172,473 30,306,787
sale
Reinsurance assets (Excl. prepaid 9 40,561,162 40,561,163 9,877,010 16,776,921 13,907,232 - -
reinsurance)
Other receivables - financial assets 11 723,613 520,662 520,662 - - - -
Loans and advances 12 1,395,564 1,609,670 792,304 116,745 233,066 467,555 -
Statutory deposit 18 500,000 500,000 - - - - 500,000

Total financial assets 285,843,948 601,872,836 52,862,070 23,093,438 26,937,943 117,972,762 381,006,623

Trade payables 19 2,564,194 2,564,194 1,538,516 1,025,678 - - -

Other liabilities - financial liabilities 21 3,459,082 1,702,618 30,000 1,482,515 190,103 - -
Insurance contract liabilities (excl.
IBNR and unearned premium)) 22 207,217,344 207,217,342 4,144,347 7,252,607 10,360,867 12,433,040 173,026,481
Investment contract liabilities 23 21,890,990 21,890,990 1,010,795 559,033 884,518 8,861,645 10,574,999

Total financial liabilities 235,131,610 233,375,144 6,723,658 10,319,833 11,435,488 21,294,685 183,601,480

Gap 50,712,338 368,497,692 46,138,412 12,773,605 15,502,455 96,678,077 197,405,143

It is not expected that cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.
92 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

(g) Market risks

Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices. Market risk comprises three types of risk:
foreign exchange rates (currency risk), market interest rates (interest rate risk) and market
prices (price risk).
- The Company’s enterprise risk management policy sets out the assessment and
determination of what constitutes market risk . Compliance with the policy is monitored and
exposures and breaches are reported to the company risk committee. The policy is reviewed
regularly for pertinence and for changes in the risk environment.
- Guidelines are set for asset allocation and portfolio limit structure, to ensure that assets
back specific policyholder's liabilities and that assets are held to deliver income and gains for
policyholders which are in line with expectations of the policyholders.
- The Company stipulates diversification benchmarks by type of instrument and
geographical area, as the Company is exposed to guaranteed bonuses, cash and annuity
options when interest rates falls.

(h) Currency risk

Currency risk is the risk that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates.

The Company's principal transactions are carried out in Naira and its exposure to foreign
exchange risk arise primarily with respect to US dollar and CFA.

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

The table below summarises the Company’s financial assets and liabilities by major
currencies. Note that irrespective of the currency in which the assets are held, the amounts
disclosed against individuals currencies are the Naira equivalent of the respective
currencies. The exchange rates applied for each of the listed currencies have been obtained
from reliable sources depicting reliable market transactions on 31 December 2019.
ANNUAL REPORT
& ACCOUNTS 2019 93
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Company

31 December 2019 Notes Naira (N) US Dollars UK Pound Euro CFA Others Total
(USD) Sterling (GBP) France CFA

Cash and cash equivalents 6 5,887,994 19,855,546 223,581 243,487 - - 26,210,607

Trade receivables 7 102,459 - - - - - 102,459
Investment securities - FVTPL 8.1 235,092,745 3,333,082 - - - - 238,425,827
Investment securities - Available for sale 8.2 37,986,764 24,213,514 - - - 62,200,278
Reinsurance assets (Excl. prepaid reinsurance) 9 5,534,709 30,309,979 - - - - 35,844,688

Other receivables - financial assets 11 676,471 - - - 83,598 - 760,069

Loans and advances 12 1,402,795 - - - - - 1,402,795
Statutory deposits 18 500,000 - - - - - 500,000

Total financial assets 287,183,937 77,712,121 223,581 243,487 83,598 - 365,446,723

Trade payables 19 5,154,739 4,535,384 - - - 9,690,123

Other liabilities - financial liabilities 21 2,822,414 - - - - 2,822,414
Insurance contract liabilities (excl. IBNR and -
unearned premium)) 22 231,004,624 40,782,399 - - - 271,787,023
Investment contract liabilities 23 26,796,212 - - - - - 26,796,212

Total financial liabilities 265,777,990 45,317,783 - - - 311,095,773

-
Net FCY exposure 21,405,948 32,394,338 223,581 243,487 83,598 54,350,951
-
94 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Company

31 December 2018 Notes Naira (N) US Dollars UK Pound Euro CFA Others Total
(USD) Sterling (GBP) France CFA

Cash and cash equivalents 6 6,609,820 26,210,499 22,023 31,350 104,612 - 32,978,304
Trade receivables 7 395,585 - - - - - 395,585
Investment securities - FVTPL 8.1 152,278,951 3,730,810 - - - - 156,009,761
Investment securities - Available for sale 8.2 29,638,069 23,641,890 - - - 53,279,959
Reinsurance assets (Excl. prepaid reinsurance) 9 1,574,878 38,920,142 1,350 64,792 - 40,561,162
Other receivables - financial assets 11 723,613 - - - - - 723,613
Loans and advances 12 1,169,834 225,730 - - - - 1,395,564
Statutory deposits 18 500,000 - - - - - 500,000

Total financial assets 192,890,750 92,729,071 23,373 96,143 104,612 - 285,843,949

Trade payables 19 2,005,234 558,960 - - - 2,564,194

Other liabilities - financial liabilities 21 3,459,082 - - - - 3,459,082
Insurance contract liabilities (excl. IBNR and
unearned premium)) 22 158,410,066 48,807,278 - - - 207,217,344
Investment contract liabilities 23 21,890,990 - - - - - 21,890,990

Total financial liabilities 185,765,372 49,366,238 - - - - 235,131,610

Net FCY exposure 7,125,378 43,362,833 23,373 96,143 104,612 - 50,712,339

 ANNUAL REPORT
& ACCOUNTS 2019 95
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Foreign currency sensitivity

The tables below shows the sensitivity of the Company’s profit before tax to appreciation or depreciation of the
naira in relation to other currencies. Based on the past years behaviour, it is reasonable to assume 1000 basis
points appreciation and 1000 basis points depreciation of the Naira holding all other variables constant.

31 December 2019 31 December 2018

Company Impact on Impact on Impact on Impact on equity
Change in profit before equity profit before
Currency variables tax tax

US Dollar + 1000 basis points 3,239,434 2,267,604 4,336,283 3,035,398

Pound sterling + 1000 basis points 22,358 15,651 2,337 1,636
Euro + 1000 basis points 24,349 17,044 9,614 6,730
US Dollar - 1000 basis points (3,239,434) (2,267,604) (4,336,283) (3,035,398)
Pound sterling - 1000 basis points (22,358) (15,651) (2,337) (1,636)
Euro - 1000 basis points (24,349) (17,044) (9,614) (6,730)

(i) Interest rate risks:

Interest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates.

Exposure to this risk primarily results from timing differences in the repricing of assets and liabilities as they
mature ( fixed rate instruments) or contractually repriced (floating rate instruments).

The Company monitors this exposure through periodic reviews of the assets and liability position. Estimates of
cash flows, as well as the impact of interest rate fluctuations relating to the investment portfolio and insurance
provisions are modeled and reviewed .

The overall objective of these strategies is to limit the net change in value of assets and liabilities arising from
interest rate movements.

While it is more difficult to measure the interest sensitivity of insurance liabilities than that of the related assets, to
the extent that such sensitivities are measurable then the interest rate movements will generate asset value
changes that substantially offset changes in the value of the liabilities relating to the underlying products. The table
below details the interest rate sensitivity analysis of the Company as at 31 December 2019 holding all other
variables constant. Based on historical data, 100 basis points change is deemed to be reasonably possible and are
used when reporting interest rate risk.
 96 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Company
31 December 2019 Non-interest 0-3 months 3-6 months 6-12 months 1-5 years Over 5 years Total
Notes bearing
Cash and cash equivalents 6 5,304,711 20,905,896 - - - - 26,210,607
Investment securities - FVTPL 8.1 9,153,567 - 2,680,505 168,093 20,196,515 206,227,147 238,425,827
Investment securities - AFS 8.2 26,984,599 597,845 2,511 65,461 14,648,846 19,901,015 62,200,278
Loans and advances 12 7,231 149,301 400,468 845,795 - 1,402,795
Statutory deposits 18 - - - - - 500,000 500,000

Total 41,450,108 21,503,741 2,832,317 634,022 35,691,156 226,628,162 328,739,507

Investment contract liabilities 23 - 1,321,951 682,032 1,079,130 10,811,387 12,901,713 26,796,212

Total - 1,321,951 682,032 1,079,130 10,811,387 12,901,713 26,796,212

Gap 41,450,108 20,181,790 2,150,285 (445,108) 24,879,769 213,726,449 301,943,294

Cumulative gap 41,450,108 61,631,898 63,782,183 63,337,075 88,216,844 301,943,294

Impact on profit before tax - 6,163,190 6,378,218 6,333,707 8,821,684 30,194,329 57,891,129
Taxation at 30% - 1,848,957 1,913,466 1,900,112 2,646,505 9,058,299 17,367,339
Impact on equity - 4,314,233 4,464,753 4,433,595 6,175,179 21,136,031 40,523,791

Company
31 December 2018 Non-interest 0-3 months 3-6 months 6-12 months 1-5 years Over 5 years Carrying amount
bearing
Cash and cash equivalents 6 5,138,147 27,840,157 - - - - 32,978,304
Investment securities - FVTPL 8.1 - - 2,386,215 336,052 11,480,151 141,807,344 156,009,761
Investment securities - AFS 8.2 0 - 382,364 3,182,306 5,276,352 44,943,897 53,784,919
Loans and advances 12 - 149,301 400,468 845,795 - 1,395,564
Statutory deposits 18 - - - - 500,000 500,000
Total 5,138,147 27,840,157 2,917,880 3,918,826 17,602,298 187,251,241 244,668,548

Investment contract liabilities 23 - 1,010,795 559,033 884,518 8,861,645 10,574,999 21,890,990

Borrowings - - - - - - -

Total - 1,010,795 559,033 884,518 8,861,645 10,574,999 21,890,990

Gap 5,138,147 26,829,362 2,358,847 3,034,308 8,740,653 176,676,242 222,777,558

Cumulative gap 5,138,147 31,967,509 34,326,356 37,360,664 46,101,316 222,777,558

Impact on profit before tax 3,196,751 3,432,636 3,736,066 4,610,132 22,277,756 37,253,340
Taxation at 30% 959,025 1,029,791 1,120,820 1,383,039 6,683,327 11,176,002
Impact on profit after tax 2,237,726 2,402,845 2,615,246 3,227,092 15,594,429 26,077,338
ANNUAL REPORT
& ACCOUNTS 2019 97
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

(j) Equity price risk

The Company manages its exposure to equity price risk through adherence to investment
in eligible equities as approved by the Board and in line with NAICOM investment
guidelines. Management Investment Committee establishes and approves a list of eligible
stocks in line with approval as approved by the Board through its Board Investment
Committee. The investment decisions are subject to authorization(s) levels.

Management Investment Committee

1. An investment which would result in exposure to the invested company for not greater
than 5% of the issue under consideration i.e. Equities, Bonds etc.
2. Investment in any unquoted stock with value less than N500m.

Board Investment Committee

i. An investment which would result in exposure to the invested company for greater than
5% of the issue under consideration.
ii. Any investment where the value of total exposure to the invested corporate on
completion, as a percentage of total Leadway’s Asset Under Management will exceed
2.5% as at the time of the investment.
iii. An Investment in any unquoted stock with value greater than N500m.
iv. Investment in a start-up venture with value over N100m.
v. Investments in a company, which will result in the Leadway having control of
management.
vi. Securities lending, leveraged investments, derivatives or hedging.

We have exposure to equity risk through asset/liability mismatches, including our

investments in equity securities held in our investment portfolio. Changes in equity prices
create risk that the resulting changes in asset values will differ from the changes in the value
of the liabilities. Additionally, changes in equity prices may impact other items including, but
not limited to investment income of the Company.

Company Company
31-Dec-19 31-Dec-18
Financial assets +/- 1500 basis +/- 2000 basis
points points
Listed equities (FVTPL) 405,725 275,527
Listed equities(AFS) 2,323,180 1,087,383
Unlisted equities (AFS) 852,213 919,963
Impact on profit before tax 405,725 275,527
Tax charge of 30% (121,717) (82,658)

Impact on profit after tax 284,007 192,869

Impact on equity 3,459,400 2,200,215

98 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

3.4 Fair values of financial assets and liabilities

Accounting classification, measurement basis and fair values

The table below sets out the Croup's classification of each class of financial assets and liabilities, and their fair valuesot limited to investment income of the
Company.

Company Notes At fair value Held to Loans and Available for Other financial Total carrying Fair Value
31 December 2019 through P/L Maturity receivables sale liabilities at amount
amortised cost
Assets
Cash and cash equivalents 6 - - 26,210,607 - - 26,210,607 26,210,607
Trade receivables 7 - - 102,459 - - 102,459 102,459
Investment securities - FVTPL 8.1 238,425,827 - - - - 238,425,827 238,425,827
Investment securities - AFS 8.2 - - - 62,200,278 - 62,200,278 62,200,278
Reinsurance assets (Excl. prepaid
reinsurance) 9 - - 35,844,688 - - 35,844,688 35,844,688
Other receivables 10 - - 760,069 - - 760,069 760,069
Loans and advances 12 - - 1,402,795 - - 1,402,795 1,402,795
Statutory deposits 18 - - 500,000 - - 500,000 500,000

Total 238,425,827 - 64,820,618 62,200,278 - 365,446,723 365,446,723

Liabilities

Trade payables 19 - - - - 9,690,123 9,690,123 9,690,123

Other liabilities 21 - - - - 2,822,414 2,822,414 2,822,414
Insurance contract liabilities (excl.
IBNR and unearned premium)) 22 224,547,452 - - - 47,239,571 271,787,023 271,787,023
Investment contract liabilities 23 - - - - 26,796,212 26,796,212 26,796,212

Total 224,547,452 - - - 86,548,321 311,095,773 311,095,773

ANNUAL REPORT
& ACCOUNTS 2019 99
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Company Notes At fair value Held to Loans and Available for Other financial Total carrying Fair Value
31 December 2018 through P/L Maturity receivables sale liabilities at amount
amortised cost
Assets
Cash and cash equivalents 6 - - 32,978,304 - - 32,978,304 32,978,304
Trade receivables 7 - - 395,585 - - 395,585 395,585
Investment securities - FVTPL 8.1 156,009,761 - - - - 156,009,761 156,009,761
Investment securities - AFS 8.2 - - - 53,279,959 - 53,279,959 53,279,959
Reinsurance assets (Excl. prepaid
reinsurance) 9 - - 40,561,162 - - 40,561,162 40,561,162
Other receivables 10 - - 723,613 - - 723,613 723,613
Loans and advances 12 - - 1,395,564 - - 1,395,564 1,395,564
Statutory deposits 18 - - 500,000 - - 500,000 500,000

Total 156,009,761 - 76,554,228 53,279,959 - 285,843,948 285,843,948

Liabilities

Trade payables 19 - - - - 2,564,194 2,564,194 2,564,194

Other liabilities 21 - - - - 3,459,082 3,459,082 3,459,082
Insurance contract liabilities (excl.
IBNR and unearned premium) 22 150,428,171 - - - 56,789,173 207,217,344 207,217,344
Investment contract liabilities 23 - - - - 21,890,990 21,890,990 21,890,990

Total 150,428,171 - - - 84,703,439 235,131,610 235,131,610

100 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

3.4.1 Fair value hierarchy

The Company's accounting policy on fair value measurement is disclosed in note 2.6. The
table below analyses financial instruments carried at fair value, by valuation method. The
different levels have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that
the entity can access at the measurement date.

Level 2: inputs other than quoted prices included within level 1 that are observable for the
asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
These may include quoted prices for similar assets or liabilities in active markets or quoted
prices for identical or similar assets and liabilities in markets that are not active.

Level 3: techniques which use inputs which have a significant effect on the recorded fair
value that are not based on observable market data (that is, unobservable inputs). It also
includes financial instruments whose fair values could not be reliably determined and so
they were measured at cost.
(a) The following table presents the financial assets and liabilities that are measured at fair
value as at 31 December 2019. See note 4.1b for non-financial assets that are measured at
fair value.
ANNUAL REPORT
& ACCOUNTS 2019 101
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Company
31 December 2019
All amounts are in thousands of Naira unless otherwise stated

Assets Level 1 Level 2 Level 3 Total

Investment securities:
Fair value through profit or loss
- Equity securities 2,705,428 - - 2,705,428
- Federal government bond 230,712,790 - - 230,712,790
- State government 167,210 - - 167,210
- Corporate bonds 4,840,399 - - 4,840,399
- -
Available for sale 149,107
- Listed equity securities 15,338,757 - - 15,487,864
- Unlisted equity securities at cost - - 5,681,418 5,681,418
- Listed debt securities 41,030,996 - - 41,030,996
Total 294,795,580 149,107 5,681,418 300,626,105

Company
31 December 2018
All amounts are in thousands of Naira unless otherwise stated

Assets Level 1 Level 2 Level 3 Total

Investment securities:
Fair value through profit or loss
- Equity securities 2,755,268 - - 2,755,268
- Federal government bond 124,218,042 - - 124,218,042
- State government - 1,174,286 - 1,174,286
- Corporate bonds - 2,286,615 - 2,286,615
- - -
Available for sale -
- Listed equity securities 10,873,826 - 1,559,679 10,873,826
- Unlisted equity securities at cost - - - 1,559,679
- Listed debt securities 33,624,019 - 1,774,017 33,624,019
- Unlisted equity securities - 2,939,739 3,333,696 4,713,756
Total 171,471,155 6,400,640 181,205,491

There were no transfers between levels 1 and 2 during the year

(i) Financial instruments in level 1

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet
date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker,
industry company, pricing service, or regulatory agency, and those prices represent actual and regularly occurring
market transactions on an arm's length basis. The quoted market price used for financial assets held by the company is
the current bid price.

(ii) Financial instruments in Level 2

The fair value of financial instruments that are not traded in an active market is determined by using valuation
techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little
as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

Specific valuation techniques used to value financial instruments include:

(i) Quoted market prices or dealer quotes for similar instruments;
(ii) Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial
instruments

The Company's level 2 corporate bonds, state bonds and unlisted equities were valued using quoted market prices for
similar instruments at the measurement date.
102 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

(iii) Financial instruments in level 3

The following table presents the changes in Level 3 instruments for the year ended 31 December 2019

All amounts are in thousands of Naira unless otherwise stated

Equity securities - Available for sale Company Company

31-Dec-19 31-Dec-18

Opening balance 2,656,311 2,272,484

Acquisitions 465,000 -
Disposals - -
Reclassification from investments at cost less impairment (see note 8.2.1a) 1,080,000 183,000

Reclassifications from Level 2 3,033,000 -

Changes in fair value recognised in other comprehensive income (1,558,000) 200,827

Balance, end of year 5,676,311 2,656,311

Varying valuation techniques in determining the fair value of Level 3 item, investments in AFC, Capital Bancorp,
Lekky Budget Limited, Mainstreet Technologies, Oakwood Park Limited, Energy & Allied Limited, JDI Investment
Company, Nigeria Liability Insurance Pool are as follows:

Valuation technique Unobservable Range of Relationship of unobservable inputs

inputs unobservable to fair value
inputs (probability -
weighted average)

Market Approach P/BV multiples 0.85x - 5.88x The higher the multiples the higher the
fair value of the asset.
EV/EBITDA 5.73x - 15.57x
multiples

EV/EBITDA or P/E valuation multiple - the company determines appropriate comparable public company/ies based
on industry, size, developmental stage, revenue generation and strategy. The company then calculates a trading
multiple for each comparable company identified. The multiple is calculated by either dividing the quoted price of the
comparable company by its net income (P/E).

Financial instruments not measured at fair value

The following table sets out fair values of financial instruments not measured at fair value and analyses them by level
in the fair value hierarchy into which each fair value measurement is categorised.
ANNUAL REPORT
& ACCOUNTS 2019 103
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Company
31 December 2019
All amounts are in thousands of Naira unless otherwise stated

Assets Level 1 Level 2 Level 3 Total

Cash and cash equivalents - 26,210,607 - 26,210,607

Held to maturity investment securities:
State bonds - - - -
Corporate bonds - - - -
Federal government bonds - - - -
Federal government treasury bills - - - -
Available for sale: Unlisted equity at
cost - - 102,459 102,459
Trade receivables - - 1,402,795 1,402,795
Loans and advances - - 35,844,688 35,844,688
Reinsurance assets (Excl. prepaid
reinsurance) - - 760,069 760,069
Other receivables - - - -
Statutory deposits - - - -

Total financial assets - 26,210,607 38,110,011 64,320,618

Liabilities

Investment contract liabilities - - 26,796,212 26,796,212

Trade payables - - 9,690,123 9,690,123
Other liabilities - - 2,822,414 2,822,414

Total financial liabilities - - 39,308,750 39,308,750

104 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Company
31 December 2018
All amounts are in thousands of Naira unless otherwise stated

Assets Level 1 Level 2 Level 3 Total

Cash and cash equivalents - 32,978,304 - 32,978,304

Held to maturity investment securities:
State bonds - - - -
Corporate bonds - - - -
Federal government bonds - - - -
Federal government treasury bills - - - -
Available for sale: Unlisted equity at
cost - - - -
Trade receivables - - 395,585 395,585
Loans and advances - - 1,395,564 1,395,564
Reinsurance assets (Excl. prepaid - - 40,561,162 40,561,162
reinsurance)
Other receivables - - 723,613 723,613
Statutory deposits - - - -

Total financial assets - 32,978,304 43,075,924 76,054,228

Liabilities 21,890,990 21,890,990

Investment contract liabilities - - 2,564,194 2,564,194
Trade payables - - 3,459,082 3,459,082
Other liabilities - - - -

Total financial liabilities - - 27,914,266 27,914,266

The fair value for financial assets and liabilities that are not carried at fair value were determined respectively as follows:

(i) Cash
Included in the balances of cash and cash equivalents are cash and balances with banks and short term placement. The
carrying amount of cash and cash equivalents is a reasonable approximation of fair value.

(ii) Loans and advances

The estimated fair value of loans and advances represents the discounted amount of estimated future cashflows
expected to be received. Expected future cashflows are discounted at the current market rate to determine the fair
value.

(iii) Trade receivables, Other Receivables, Reinsurance Assets (Excl. prepaid reinsurance), Trade payables and Other
liabilities
The estimated fair value of receivables and payables with no stated maturity which includes no interest payables and
receivables is the amount repayable or received on demand. The carrying amounts are reasonable approximation of
their fair values which are payable on demand.

(iv) Investment contract liabilities

Investment contracts are those that do not transfer significant insurance risk from the contract holder to the issuer. The
carrying amount of investment contract liability is a reasonable approximation of fair value.
ANNUAL REPORT
& ACCOUNTS 2019 105
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

3.4 Management of insurance risk

The Company issues contracts that transfer insurance risk or financial risk or both. This section summarizes these risks and
the way the Company manages them.

Insurance Risk
Insurance risk arises from accepting risks which turn out to be inappropriate or pricing the risks accepted inappropriately. The
principal risk that the Company faces under its insurance contracts is that the actual claims and benefits payments exceed the
carrying amount of the insurance liabilities. This could occur because the frequency or severity of claims and benefits are
greater than estimated. Insurance events are random, and the actual number and amount of claims and benefits could vary
from year to year from the level established using statistical techniques.

Our insurance underwriting strategy has been developed in such a way that the types of insurance risks accepted are
diversified to achieve a sufficiently large population of risks to reduce the variability of the expected outcome. Insurance risk is
increased by the lack of risk diversification in terms of type and amount of risk, geographical location and type of industry
covered.

General Insurance Contracts

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

Underwriting limits are in place to enforce appropriate risk selection criteria. For example, the Company has the right not to
renew certain policies, it can impose excess or deductibles and has the right to reject the payment of a fraudulent claim.
Insurance contracts also entitle the Company to pursue third parties for payment of some or all of claims costs. The
reinsurance arrangements include excess and proportional coverage. The effect of such reinsurance arrangements is that the
Company should not suffer total net insurance losses in any one year.

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

Company Life Reinsurance

The table below shows the Company life risk exposure by industry or sector in 2019. The table shows that the company’s
exposure is highly skewed towards Civil Service/Government agency followed by Estate Management/Insurance, Banking &
Financial Institutions.

All amounts are in thousands of Naira unless otherwise stated

Share of Share of
Industry/Sector Before Reinsurance Gross After Reinsurance net SA

Civil Service/Government Agency 241,999,824,227 18% 240,408,490,188 19%

Education, Research & Professional Institutions 28,122,248,392 2% 27,657,772,250 2%
Engineering & Construction 77,380,822,431 6% 70,125,391,152 5%
Estate Management/Insurance, banking &
Financial Institutions 280,055,160,170 21% 274,717,029,305 21%
Foods & Beverages/Agro-allied 37,904,653,425 3% 36,921,548,824 3%
Health Service provider 17,588,281,802 1% 17,375,655,099 1%
Hotels and Resorts/catering services 10,653,473,759 1% 10,626,856,257 1%
Manufacturing 26,290,175,700 2% 25,013,640,718 2%
Marine & Aviation 23,088,800,951 2% 21,992,806,781 2%
Marketing & Consulting/Supplies &
Trading/Courier Services 99,157,329,111 7% 96,258,868,134 7%
Others 51,992,685,362 4% 50,240,460,428 4%
NNPC 21,938,204,609 2% 21,938,204,609 2%
Oil & Gas 60,283,093,781 5% 46,842,252,319 4%
Radio & Television/ Electronics &
Telecommunications 35,145,440,000 3% 33,793,649,038 3%
Religious institutions/NGO/Clubs& 95,005,134,073 7% 93,923,216,729 7%
Associations
Security Personnel 217,181,311,829 16% 217,113,308,129 17%
1,323,786,639,622 100% 1,284,949,149,960 100%
106 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

b) Sources of uncertainty in the estimation of future claim payments

Claims on general insurance contracts are payable on a claims-occurrence basis. The Company is liable for all insured events
that occurred during the term of the contract. There are several variables that affect the amount and timing of cash flows from
these contracts. These mainly relate to the inherent risks of the business activities carried out by individual contract holders
and the risk management procedures they adopted. The estimated cost of claims includes direct expenses to be incurred in
settling claims, net of the expected subrogation value and other recoveries.

The Company takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures.
However, given the uncertainty in establishing claims provisions, it is likely that the final outcome will prove to be different
from the original liability established. The reserves held for these contracts comprises of a provision for IBNR, a provision for
reported claims not yet paid and a provision for unearned premiums at the end of the reporting period.

c) Process used to decide on assumptions

General insurance contract liabilities: The discounted inflation adjusted chain ladder method (IABCL) was applied for
reserving in respect of general insurance risk, with the exception of special risk policies reserved using the Expected Loss
Ratio Approach. The discounted inflation adjusted chain ladder method (IABCL) method involves historical paid losses
adjusted for inflation using the corresponding inflation index in each of the accident years to the year of valuation and then
accumulated to their ultimate values for each accident year to obtain the projected outstanding claims. The projected
outstanding claims are then further multiplied by the future inflation index from the year of valuation to the future.

The Expected Loss Ratio Approach was adopted for the special risk sub-category of general insurance risks due to the
volume of data available being too small to be credible when using a statistical approach. Under this method, the ultimate
claims is obtained by assuming loss ratio. Paid claims already emerged is then deducted for from the estimated ultimate
claims.

The provision for outstanding claims, including IBNR, was determined for each line of business on both gross and net of
reinsurance basis. A yearly cohort from year 2007 has been adopted in building the historical claims.

Year Inflation index Accumulated Inflation Index

2007 6.6% 319.2%
2008 15.1% 293.2%
2009 13.9% 241.6%
2010 11.8% 199.9%
2011 10.3% 168.3%
2012 12.0% 143.2%
2013 8.0% 117.2%
2014 8.3% 101.1%
2015 9.6% 85.7%
2016 18.5% 69.4%
2017 15.4% 43.0%
2018 11.3% 23.9%
2019 11.4% 11.4%
2020+ 12.0%
See note 22.4 for claims development tables

Key assumptions

The methods assumes that future claims follow a regression pattern from the historical data. Hence payment patterns will be
broadly similar in each accident year. Thus the proportionate increase in the known cumulative payments from one
development year to the next is used to calculate the expected cumulative payments for the future development periods.

- An implicit assumption of the chain ladder is that weighted past average inflation will remain unchanged in to the future.
- We assume gross claim amount includes all related claim expenses. If this is not the case, we will hold a separate reserve to
cover claim expenses.
- The UPR is calculated on the assumption that risk will occur evenly during the duration of the policy.
- The BF method assumes past experience is not fully representative of the future.
- Historical average loss ratio under gross Special Risk is 26% and 6.5% is the proportion of recoveries to ceded premiums, we
have assumed loss ratio of 50% and 20% respectively.
ANNUAL REPORT
& ACCOUNTS 2019 107
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Life insurance contract liabilities- Individual risk business comprises whole life assurances, endowment assurances and
term assurances of descriptions, including mortgage protection and credit life. For all individual risk business the gross
premium method of valuation was adopted. Reserves were calculated via a cashflow projection approach, taking into account
future office premium, expenses and benefit payments, including payments on surrender where applicable. Future cashflows
were discounted back to the valuation date at the valuation rate of interest.
An unexpired premium reserve was included for Company life business, after allowing for acquisition expenses. Where
required, an additional unexpired risk reserve is held for any inadequacies in the unexpired risk reserve for meeting claims in
respect of the unexpired period. The claim rates underlying the determination of additional unexpired risk reserve were
based on pooled historical scheme claims experience.

An allowance was made for incurred but not reported (IBNR) claims in company life to take care of delay in reporting claims.
This was based on Chain Ladder method, where the company business was grouped into two classes - Public and Private
Businesses. Historical claims were grouped into accident year cohorts-representing how they were paid after their accident
year to form development triangles. For each accident year, paid claims were accumulated to the valuation date and projected
into the future to obtain the expected ultimate claim arising for that year. This assumes the trends observed in the historical
data will continue. The gross claim reserve is calculated as the difference between the estimated ultimate claims and the
accumulated paid claims. For the later years where the cohorts are underdeveloped or has less than expected claims, the
Bornheutter Ferguson (BF) method was used to estimate the ultimate claims. The appropriate loss ratio used in estimating
the BF ultimate claim was the average of fully developed historical years.

Key assumptions

Material judgment is required in determining the liabilities and, in particular, in the choice of assumptions. Assumptions in use
are based on past experience, current internal data, external market indices and benchmarks which reflect current
observable market prices and other published information. Assumptions and prudent estimates are determined at the date of
valuation and no credit is taken for possible beneficial effects of voluntary withdrawals. Assumptions are further evaluated on
a continuous basis in order to ensure realistic and reasonable reserves are set aside to meet liabilities.
 108 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

(i) Sensitivity analysis on insurance contract liabilities

The analysis which follows is performed for reasonably possible movements in key assumptions with all other assumptions held constant, and shows the impact on gross and net liabilities, profit before tax and equity. The
correlation of assumptions will have a significant effect in determining the ultimate claims liabilities, but to demonstrate the impact due to changes in assumptions, the assumptions had to be changed on an individual basis.

It should be noted that movements in these assumptions are non-linear. Sensitivity information will also vary according to the current economic assumptions, mainly due to the impact of changes to both the intrinsic cost and time
value of options and guarantees. When options and guarantees exist, they are the main reason for the asymmetry of sensitivities.

Sensitivities were not applied to the Reinsurance for individual life business as its value is immaterial. Also, Mortality sensitivity tests were applied in the opposite direction for the annuity business. These are as shown below:

Life insurance contract liabilities

Expense Expense
N'000m Base Interest rate +1% Interest rate -1% Expenses +10% Expenses -10% Inflation +2% Inflation -2% Lapses +10% Lapses -10% Mortality +5% Mortality -5%

Investment Linked
Plans - Fund Balance 17,088,550 17,088,550 17,088,550 17,088,550 17,088,550 17,088,550 17,088,550 17,088,550 17,088,550 17,088,550 17,088,550
Investment Linked
Plans - Risk Reserve 167,328 164,517 170,294 186,404 148,691 174,323 161,036 167,328 167,328 168,658 166,003
Traditional Plans
(excluding Annuity) 3,884,533 3,796,798 3,984,655 3,923,459 3,845,959 3,899,917 3,870,827 3,860,078 3,910,781 3,932,730 3,835,817
Annuity 220,436,034 209,436,964 232,574,882 220,856,608 220,015,460 221,233,886 219,805,915 220,436,034 220,436,034 221,625,508 219,276,667
Group DA 9,707,662 9,707,662 9,707,662 9,707,662 9,707,662 9,707,662 9,707,662 9,707,662 9,707,662 9,707,662 9,707,662
Group Life – UPR 1,687,347 1,687,347 1,687,347 1,687,347 1,687,347 1,687,347 1,687,347 1,687,347 1,687,347 1,687,347 1,687,347
Group Life – IBNR 1,308,642 1,308,642 1,308,642 1,308,642 1,308,642 1,308,642 1,308,642 1,308,642 1,308,642 1,308,642 1,308,642
Other Group Risk 25,693 25,588 25,800 26,791 24,604 25,827 25,559 25,616 25,770 26,322 25,079
Outstanding Claims 2,516,571 2,516,571 2,516,571 2,516,571 2,516,571 2,516,571 2,516,571 2,516,571 2,516,571 2,516,571 2,516,571
Additional reserves 34,212 34,212 34,212 34,212 34,212 34,212 34,212 34,212 34,212 34,212 34,212
Reinsurance (363,717) (363,717) (363,717) (363,717) (363,717) (363,717) (363,717) (363,717) (363,717) (363,717) (363,717)
Net liability 256,492,853 245,403,133 268,734,898 256,013,981 256,013,981 257,313,220 255,842,604 256,468,323 256,519,179 257,732,484 255,282,832

% Change in net liability - -4.32% 4.77% 0.19% -0.19% 0.32% -0.25% -0.01% -0.01% 0.48% -0.47%

Summary Base Interest rate +1% Interest rate -1% Expense +10% Expense -10% Expense Expense Lapse +20% Lapse -20% Mortality +1% Mortality -1%
Inflation +1% Inflation -1%
Individual 241,841,761 230,752,146 254,083,698 242,320,339 241,363,978 242,661,994 241,191,646 241,817,307 241,868,010 243,080,763 240,632,354
Group 14,651,092 14,650,987 14,651,199 14,652,191 14,650,003 14,651,227 14,650,959 14,651,016 14,651,169 14,651,722 14,650,478
Net liability 256,492,853 245,403,133 268,734,898 256,972,529 256,013,981 257,313,220 255,842,604 256,468,323 256,519,179 257,732,484 255,282,832

% change in liability - -4.32% 4.77% 0.19% -0.19% 0.32% -0.25% -0.01% 0.48% -0.47%

---The mortality stress has been applied in the opposite direction for annuities. For example the 5% strengthening of the mortality assumption was modelled as 5% lighter mortality for annuitants.
---All stresses were applied independently
--- All stresses were applied independently
 ANNUAL REPORT
& ACCOUNTS 2019 109
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

(b) General insurance contract liabilities

5% Development -5% Development 1% Inflation -1% Inflation 1% Discount -1% Discount

Class of business Base Ratio Ratio Rate Rate Rate Rate

General Accident 1,057,128,163 1,061,812,824 1,053,181,098 1,066,341,345 1,047,981,571 1,049,232,671 1,065,207,866

Engineering 500,873,684 503,378,642 497,898,549 504,708,048 497,051,131 497,969,575 503,829,567
Fire 2,240,883,588 2,269,943,925 2,206,574,244 2,251,942,195 2,229,864,210 2,227,244,756 2,254,773,189
Marine 1,269,657,002 1,276,622,936 1,259,867,172 1,276,558,078 1,262,772,120 1,262,776,431 1,276,654,463
Motor 1,450,113,088 1,496,528,008 1,406,816,108 1,463,866,741 1,436,421,950 1,441,227,231 1,459,177,800
Agric 209,634,812 231,812,593 187,457,031 209,634,812 209,634,812 209,634,812 209,634,812
Bond 642,662,511 660,436,653 634,110,480 648,502,665 636,824,666 639,730,615 645,635,551
Special Risks 50,647,006,401 50,660,285,681 50,632,168,918 50,819,762,915 50,475,232,953 50,294,213,624 51,007,265,705
Total 58,017,959,249 58,160,821,263 57,878,073,600 58,241,316,800 57,795,783,413 57,622,029,714 58,422,178,954
Account outstanding 44,723,650,216 44,723,650,216 44,723,650,216 44,723,650,216 44,723,650,216 44,723,650,216 44,723,650,216
Difference 13,294,309,033 13,437,171,048 13,154,423,382 13,517,666,584 13,072,133,197 12,898,379,498 13,698,528,739
Percentage change 0.25% -0.24% 0.39% -0.38% -0.68% 0.70%
110 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

The key assumptions to which the estimation of liabilities is particularly sensitive to are as follows:

Mortality and morbidity rates

Our assumptions are based on standard industry and national tables, according to the type of contract written . They are
adjusted when appropriate to reflect historical experience of the portfolio.

An appropriate, but not excessive prudent allowance is made for expected future improvements.

An increase in rates on products other than life annuities will lead to a larger number of expected claims (and claims could
occur sooner than anticipated), which will increase the reserve and reduce reported profits for the shareholders. For Life
annuities, the converse will be true.

Longevity

Our assumptions are based on standard industry and national tables, according to the type of contract written . They are
adjusted when appropriate to reflect historical experience of the portfolio.

An appropriate, but not excessive prudent allowance is made for expected future improvements.

An increase in longevity rates will lead to an increase in the expected number of annuity payments to be made, which will
increase the reserve and reduce reported profits for the shareholders.

Investment return

The actual yield curve is derived from the spot rates of the FGN fixed income securities as provided by FMDQ. These rates are
based on current market returns as well as expectations about future economic and financial developments.

An increase in investment return would lead to a reduction in reserves and an increase in reported profits for the
shareholders.

Expenses

Operating expense assumption reflects the projected costs of maintaining and servicing in–force policies and associated
overhead expenses. The current level of expenses is taken as an appropriate expense base, adjusted for expected expense
inflation if appropriate.

An increase in the level of expenses would result in an increase in expected expenditure thereby reducing reported profits for
the shareholders.

Lapses and surrender rates

Lapses relate to the termination of risk policies due to non–payment of premiums. Surrenders relate to the voluntary
termination of policies by policyholders. Policy termination assumptions are determined using statistical measures based on
the Company’s experience and vary by product type.

Usually, an increase in lapse rates early in the life of the policy would tend to reduce profits for shareholders to the
unrecouped initial expenses.

Life insurance liabilities are determined as the sum of the discounted value of the expected future benefits and future
administration expenses directly related to the contract, less the discounted value of the expected future premiums from the
contract. Discount rates are based on the risk free rate at different tenors plus an adjustment for risk.

A decrease in the discount rate will increase the value of the insurance liability and therefore reduce profits for the
shareholders with the exception of a perfectly matched annuity portfolio where both assets and liabilities will increase by the
same magnitude.

The following table outlines the general form of terms and conditions that apply to contracts sold in each category of business,
and the nature of the risk incurred by the Company.
ANNUAL REPORT
& ACCOUNTS 2019 111
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Name Features
1 Leadway Immediate Annuity Plan Designed to help with the cost of retirement by providing a guaranteed income for the rest of
the policyholder’s life. The annual payments can be made monthly, quarterly or annually.

During the stated guarantee period, the annuity payments will continue whether the annuitant
is alive or not. If the annuitant dies before the end of the guarantee period the present value of
the outstanding payment due within the guarantee period shall be payable in a lump sum to the
name beneficiary or to the estate of the annuitant under probate.

2 Annuity certain Policyholder buys into this product and pays a lump-sum premium. The policyholder in turn
receives pre-defined payments throughout the term of the policy. If the policyholder dies within
the annuity period, the balance in the annuity is payable to the beneficiary, but if he survives the
annuitant (policy holder) gets the annuity.

3 Education Protection Plan The policy covers payment of fees for the named beneficiary children or ward whilst in school or
college in the event of death, total permanent disablement (optional cover) or critical illness
(optional cover) of the named parent and/or Policyholder. The policy has a minimum term of one
year and has options for Level Benefit and Decereasing benefit.

The benefit shall be payable to the named school through the named legal guardian for the
unexpired school years as stated in the schedule.

4 Family Benefit Plan A whole Life Assurance product that pays sum assured on death of policyholder or any of the
parents or spouse insured. - Policy terminates on first death. - Additonal grocery voucher of
N25,000 on death of any member and a family support benefit payable for 6 months in
installments of N20,000 on death of policyholder.

5 Family Benefit Plan Plus A Whole Life Assurance that pays sum assured on death of each of the members covered by the
policy

Policy terminates on the death of the policyholder.

Additonal grocery voucher of N25,000 on death of any member and a family support benefit of
N20,000 payable for 6 months on death of policyholder.

6 Company life Sum assured is payable in the event of death of a member while in the service of the employer
and before retirement.

Refund of premium: in the event that the life assured is terminated before the normal
retirement date from any cause other than death, the Company will pay to the employer a
rebate in respect of the relative premium proportionate to the unexpired portion of the then
current year of assurance.

Premium rates are annually renewable.

Leadway has the right to charge extra premiums on medical grounds.

7 Credit Life Credit Life Protection that pays outstanding loan amount on death. There are disability and job
loss riders.

8 Personal Loan Protection Plan Credit Life Protection that pays outstanding loan amount on Death. It has PTD and Job Loss
Covers.

9 Term Assurance The Term Assurance product pays out a lump sum if death (or any the insured event) occurs
during the period of cover.

10 Mortgage Protection Plan Credit Life Protection that pays outstanding loan amount on death. It also has optional CIC, 12
months Job loss and PTD riders.

11 REN Credit Life Credit Life Protection that pays outstanding loan amount on Death. It has PTD , Critical Illness
and 6 months Job Loss cover.

12 RSL Credit Life Insurance Credit Life Protection that pays outstanding loan amount on Death. It has PTD , Critical Illness
and 6 months Job Loss cover.

13 Vehicle Loan Protection Plan Credit Life Protection that pays outstanding loan amount on Death. It has PTD , Critical Illness
and 6 months Job Loss cover.

14 Heritage Credit Life Protection Credit Life Protection that pays outstanding loan amount on Death. It has PTD and 6 months
Job Loss cover
112 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Name Features
15 BORSTAL MFB Credit LIfe Protection Credit Life Protection that pays outstanding loan amount on Death. It has PTD and 3 months
Job Loss cover.

16 CRUTECH MFB Credit LIfe Protection Credit Life Protection that pays outstanding loan amount on Death. It has PTD, Critical Illness
and 3 months Job Loss cover.

17 EcoBank Credit Life Protection Credit Life Protection that pays outstanding loan amount on Death and PTD. It has 6 months
job loss cover.

18 M I C R O C R E D M F B C r e d i t L I f e Credit Life Protection that pays outstanding loan amount on death, critical illness and
Protection Permanent Disablility.
Outstanding loan less terminal benefit is paid on job loss. Minimum term is 1 year.

19 WEMA Credit Protection Credit Life Protection that pays outstanding loan amount on Death, critical illness and
Permanent Total Disablility.

20 Heritage Personal Protection Plan Credit Life Protection that pays outstanding loan amount on Death.

21 Small and Medium Enterprise Credit Life Protection that pays outstanding loan amount on Death. It has PTD and 6 months
job loss cover.

22 Credit Card Protection Credit Life Protection that pays outstanding loan amount on Death or named Critical Illness.

23 GTB Credit Life protection Credit Life Protection that pays outstanding loan amount on death.

24 Personal Credit Loan Credit Life Protection that pays outstanding loan amount on Death and PTD. It has 6 months
job loss cover.

25 Term Loan Protection Plan Credit Life Protection that pays outstanding loan amount with one month Job loss.

26 Company Credit Life Credit Life Protection that pays outstanding loan amount on Death or Critical Illness or PTD.
It has 6 months Job Loss also.

27 Company Mortgage Protection Credit Life Protection that pays outstanding loan amount on Death. It has PTD or 12 months
Job Loss cover.

28 Private Health Plan One year renewable term assurance with sum assurance payable on death.

PTD benefit is payable if specified by the policyholder.

29 Education Target Plan Payment of Sum Assured (Target amount) upon Death or Maturity, whichever comes earlier.
Policy terminates after payment of any benefit.

Critical Illness, Accidental, Total and Permanent disability are optional riders and attract
additional premium.

30 Leadway Target Plan Payment of Sum Assured (Target amount) upon Death or Maturity, whichever comes earlier.
Policy terminates after payment of any benefit.

Critical Illness, Accidental, Total and Permanent disability are optional riders and attract
additional premium.

31 Leadway Lifestyle Protection Plan Leadway Lifestyle Protection is a life assurance plan that provides you with a life cover and
also optionally protects you against Critical Illness, Permanent Total Disability and Job Loss.

The product pays a sum assured on occurrence of the insured risks within the policy term. The
minimum policy term is one year.

For having consecutive claim-free years, you receive a cash-back payment which is a rate on
the premiums paid in the year.
ANNUAL REPORT
& ACCOUNTS 2019 113
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Investment contract liabilities

The following table outlines the deposit based (DA) products)

Name Features
1 Deferred annuity plan This product meets protection and savings needs of a policyholder towards funding an
annuity pension at retirement.

Contributions from policy holder are to be invested in a fund. The accumulated return on the
investment as well as the invested amount is due on maturity.

Payment of Sum Assured + Savings account balance upon death.

Minimum policy term is 3 years.

On choosing critical illness and/or PTD riders, payment of sum assured on the riders + Savings
account balance in the event of claim.

Name Features

2 Leadway Investment Plan Single Premium endowment assurance that pays the higher of "Invested single premium plus
an additional 20% of invested Single Premium" and "Accumulated value of single premium" on
death or maturity. The 20% of Single Premium is subject to a maximum death risk benefit of N5
million. On Maturity, the guaranted accumulated value of the premium is paid.

A guaranteed amount (known at inception) is paid upon maturity of the investment.

Policyholders can avail additional Life Cover, Critical illness and PTD cover.

3 Personal Savings Plan Deposit Based Savings. Death benefit is sum assured + savings account balance upon death.

4 Education Target Plan Payment of Sum Assured + Savings account balance upon death, Minimum policy term is 3
years, on choosing critical illness and/or PTD riders, payment of sum assured on the riders.

5 Leadway Savings Plan Payment of Sum Assured + Savings account balance upon death.

At maturity, account deposit balance is paid.

On choosing critical illness and/or PTD riders, payment of sum assured on the riders + Savings
account balance in the event of claim.

6 Custodian Deposit based savings, Risk component is the outstanding premium payable. It is thus a
decreasing term assurance with start sum assured equal to contracted total premium.

Risk benefit is funded by the Nil and partial allocations on the premiums.

The structure for Nil and Partial allocation. Year 1- 75% allocation.Year 2 to year 4 - 90%
allocation.Year 6 afterwards- 97% allocation.
The product is running off.

7 Individual Deposit Admin The life cover granted during the policy shall be future unpaid premiums up to cessation date
provided the policy is in force. This policy has nil allocation between 4 months to 8 months
during which the overhead cost of the Company are met.If term assurance is not opted for,
100% premium will be transferred to the policyholder's account for investment purpose.

When policyholder dies, the balance in the policyholder's account plus total premium due
after death and before maturity is payable to the beneficiary. If the policyholder surrenders or
terminates the policy; the balance in the policyholder's account is payable. On maturity,
accumulated balance in the policy holder's account is paid or instalment payment of the
maturity benefit through the period of child's education.

8 Pearl Deposit based savings. No risk cover.The product is running off. No new business.
114 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

9 Company Deposit Admin Guaranteed interest (renewable annually) on all deposits received from employer.
Contribution to the fund can be on individual basis or on pool basis. If a member leaves the
service of the employer before normal retirement date, accrued benefit up to withdrawal date
in respect of employee's and employer's contribution shall be paid to the member.

Pension option:

In the event of the benefit becoming payable; it could be applied in whole or in part to secure a
Pension. This pension is payable at equal intervals to the member until he dies , however the
payment is guaranteed for a predefined period. If a member leaves the service of the employer
before normal retirement date, accrued benefit up to withdrawal date in respect of
employee's and employer's contribution shall be paid to the member. If a member dies before
the expiration of the guaranteed period a cash sum shall be payable.
ANNUAL REPORT
& ACCOUNTS 2019 115
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

4 Critical accounting estimates and judgement.

The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next
financial year. Estimates and judgements are continually evaluated and based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
These disclosures supplement the commentary on enterprise risk management (see note 3). Estimates where
management has applied judgements are:
(a) Ultimate liability arising from claims made under insurance contracts
(b) Determination of fair value of level 3 financial instruments (unquoted equities)
(c) Assessment of impairment of goodwill on acquired subsidiaries

(a) The ultimate liability arising from claims made under insurance contracts
The estimation of the ultimate liability arising from claims made under insurance contracts is one of the Company’s most
critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimate of the
liability that the Company will ultimately pay for such claims.
The ultimate cost of outstanding claims is estimated by using a standard actuarial claims projection techniques called the
Basic Chain Ladder (BCL).
The main assumption underlying these technique is that the Company’s past claims development experience can be used
to project future claims development and hence ultimate claims costs. As such, this method extrapolates the
development of paid and incurred losses, average costs per claim and claim numbers based on the observed development
of earlier years and expected loss ratios. Historical claims development is mainly analysed by accident years and the
assumptions used are those implicit in the historical claims development data on which the projections are based.
Additional qualitative judgment is used to assess the extent to which past trends may not apply in future, (for example to
reflect one-off occurrences, changes in external or market factors such as public attitudes to claiming, economic
conditions, levels of claims, inflation, judicial decisions and legislation, as well as internal factors such as portfolio mix,
policy features and claims handling procedures) in order to arrive at the estimated ultimate cost of claims that present
the likely outcome from the range of possible outcomes, taking account of all the uncertainties involved.

See note 3.4 (i) for sensitivity analysis on insurance contract liabilities.

(b) Determination of fair value of level 3 financial instruments (Unquoted equities)

Investments in unquoted equity securities that are classified as equity securities at fair value available for sale financial
instrument in line with the accounting policies as set out in note 2.6 of the statement of significant accounting policies.
See note 3.4 for the valuation methodology for the determining the fair value.

(c) Assessment of impairment of goodwill on acquired subsidiary

Leadway Assurance owns 99.9% of the shareholdings of Leadway Vie, goodwill was recognised upon acquisition of the
subsidiary. The goodwill amount was tested for impairment using discounted cash flow valuation method at year end.
Projected cash flows were discounted to present value using a discount rate of 11.1%, a first year revenue growth of
100% and subsequent average revenue growth rate of 7.7% over a period of 4 years. The Company determined the
appropriate discount rate at the end of the reporting period. See note 17 for further details.
116 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

5 Non current assets distributed and discontinued operations

Pursuant to the approval of the shareholders at the Annual General Meeting of Leadway Assurance Company Limited
held in May 2018, the Company distributed all of its holdings in Leadway Pensure PFA Limited; Leadway Hotels
Limited, Leadway Capital & Trusts Limited and Leadway Properties & Investments Limited to the shareholders of the
company as at that date and this was effected immediately.

The approval to distribute Non-insurance subsidiaries and the actual distribution was concluded in the same year,
Consequently all the related assets and liabilities relating to the subsidiaries above have been derecognised in these
financial statements. An analysis of the residual impact of this "discontinued operations" is summarised below:

a. Analysis of the result of discontinued operations

Company Company
31-Dec-19 31-Dec-18

Revenue - -
Expenses - -
Profit before tax of discontinued operations - -
Tax - -
Profit for the year from discontinued operations - -

b. Gain on Assets Distributed and Loss on Discontinued Operations

The loss/gain on distribution of the company's Non-current assets is analysed below:

Company Company
31-Dec-19 31-Dec-18

- Carrying value of assets - 3,637,495

- Fair value remeasurement adjustment - 2,931,805

Fair value of assets distributed - 6,569,300

Less:
Net assets of subsidiaries distributed
Goodwill on subsidiaries disposed
Profit recorded by the subsidiaries during the period

Reversal of fair value reserves

Reversal of treasury shares
Cost of investments in subsidiaries disposed
NCI on subsidiaries disposed - 3,637,495

(Loss)/ Gain on Assets Distributed - 2,931,805

c. Cashflow (used in)/from discontinuing operations

Company Company
31-Dec-19 31-Dec-18

Net cash used in operating activities - (216,539)

Net cash (used in)/from investing activities - (1,243,315)
Net cash used in financing activities - -
ANNUAL REPORT
& ACCOUNTS 2019 117
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

6 Cash and cash equivalents

Company Company
31-Dec-19 31-Dec-18

Cash on hand 5,886 3,241

Cash at bank 5,422,978 5,641,627
Tenored deposits 20,781,743 27,333,436

26,210,607 32,978,304

Tenored deposits are made up of placements with banks and other financial institutions with less than 3 months
maturity from the date of acquisition. The carrying amounts disclosed above reasonably approximates fair value at the
reporting date.

7 Trade receivables
(a) Trade receivable comprises the following:
Company Company
31-Dec-19 31-Dec-18

General Insurance receivables 97,595 381,436

Life Insurance receivables 4,864 14,149

102,459 395,585
Insurance receivable is analysed as follows:
Due from Contract holders
Due from Brokers - -
Due from Agents 102,459 395,585
Due from Insurance companies - -
- -
102,459 395,585
Current
102,459 395,585

(b) The age analysis of gross insurance receivables as at the end of the year is as follows:

Company Company
31-Dec-19 31-Dec-18
Analysis of premium debtors in days
0 - 30 days 102,459 395,585

8 Investment securities:
The Company's investment securities are summarised below by measurement category in the table below:

Company Company
31-Dec-19 31-Dec-18

Financial assets at fair value through profit or 238,425,827 156,009,761

loss (see note 8.1 below)
Available for sale (see note 8.2 below) 62,200,278 53,279,959
300,626,105 209,289,720

Current 3,370,650 6,286,937

Non Current 297,255,455 203,002,783
300,626,105 209,289,720
118 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

The assets comprised in each of the categories above are detailed in the tables below:

8.1 Financial assets at fair value through profit or loss

Company Company
31-Dec-19 31-Dec-18

Designated at fair value through profit or loss

Debt securities:
- Listed 235,720,995 153,254,493

Held for trading

Equity securities:
- Listed 2,704,832 2,755,268

Total financial assets at fair value through profit or loss 238,425,827 156,009,761

Current 2,704,832 2,722,267

Non Current 235,720,995 153,287,494
238,425,827 156,009,761

Movement in financial assets at fair value through profit or loss

Company Company
31-Dec-19 31-Dec-18

Opening balance 156,009,761 129,997,627

Additions 92,148,721 53,566,530
Disposals (43,953,156) (15,592,212)
Distribution of subsidiaries - -
Accrued Interest on bonds 24,944,542 19,638,174
Interest received (24,374,217) (19,379,727)
Fair value changes 33,650,175 (12,220,631)
Closing balance 238,425,827 156,009,761

8.2 Available for sale financial assets

Certain unquoted investment securities listed below for which fair values could not be reliably estimated have been
carried at cost less impairment. There are no active markets for these equity instruments, fair value information are
therefore not available making it impracticable for the company to fair value these investments. The company does not
intend to dispose any of these investments within the next financial year.

Company Company
31-Dec-19 31-Dec-18

Equity securities at fair value 15,487,864 10,873,826

- Listed 5,706,378 8,144,914
- Unlisted (see note a(I) below)
Equity securities at cost 480,000 1,559,679
- Unlisted (see note a(ii) below)
Debt securities: 41,030,996 33,206,500
- Listed 62,705,238 53,784,919

Less: allowance for impairment loss (see note (504,960) (504,960)

(b) below)
Total available for sale financial assets 62,200,278 53,279,959

Current 665,818 3,564,670

Non Current 61,534,460 49,715,289
62,200,278 53,279,959
ANNUAL REPORT
& ACCOUNTS 2019 119
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)
a (i) Analysis of unlisted available for sale financial assets:
Company Company
31-Dec-19 31-Dec-18
At fair value
Africa Finance Corporation 1,186,757 1,058,169
African Reinsurance Company Limited 1,496,056 1,678,105
Capital Bancorp 156,197 153,098
Food Concept Limited 7,000 6,600
Lekky Budget Limited 37,038 33,945
Mainstreet Technologies 339,285 151,999
Energy and Allied Insurance pool of Nigeria 310,969 221,405
MTN (reclassified to listed equities) - 1,187,962
Oakwood Park Limited - 33,593
West African Milk Company Limited 49,514 67,072
JDI investment company Ltd 23,866 47,319
Nigeria Liability Insurance Pool 94,180 74,488
Lagos Building Investment Company Ltd 104,603 56,159
Central Security Clearing System - 3,375,000
Verod Capital Management Ltd (see a(ii) below) 1,900,912
A 5,706,378 8,144,914

Company
a (ii) At cost

MotorWays Assets Limited 480,000 480,000

Verod Capital Management Ltd - 1,079,679

B 480,000 1,559,679

Less: Specific allowance for impairment

(unquoted equity securities) C (504,960) (504,960)
Total unlisted equities (A+B +C) 5,681,418 9,199,633

Fair value movement

Verod Capital Management
Opening balance 1,079,679 -
Addition 465,142 -
Fair value adjustment 356,091 -
Closing balance 1,900,912 -

(b) The movement in the allowance for impairment losses on available for sale unquoted equities is as follows:

Company Company
31-Dec-19 31-Dec-18

Balance, beginning of year 504,960 504,960

Charge for the year - -
Write off - -

Balance, end of year 504,960 504,960

(c) Movement in Available for sale assets:

Company Company
31-Dec-19 31-Dec-18

Opening balance 53,279,959 17,007,767

Additions 43,766,851 11,649,449
Reclasification to AFS from HTM - 27,547,995
Reclasification from AFS to Deposit for share** (641,462) -
Disposals (35,732,013) (620,942)
Distribution of subsidiaries -
Acquired from subsidiary - -
Fair value changes 1,108,232 (2,745,484)
Exchange gains (6,158) 441,173
Interest received (3,228,577) -
Impairment - -
Accrued Interest on bonds & treasury bill 3,929,282 -
Closing balance 62,476,114 53,279,959

**A Togo Bond was reclassified from AFS to Deposit for Shares during the year as part of Capital Injection to our Subsidiary in
Cote d'Ivoire. The transfer was completed in January 2020
120 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

9 Reinsurance assets

Company Company
31-Dec-19 31-Dec-18

Prepaid reinsurance 3,193,766 3,127,725

Reinsurance recoverable 35,352,553 40,492,413
Due from reinsurers 492,135 68,750
39,038,453 43,688,887

Company Company
31-Dec-19 31-Dec-18

(a) Prepaid reinsurance - General business 3,090,180 2,930,656

Prepaid reinsurance - Life Business 103,585 197,069
3,193,766 3,127,725
See note (i) below for movement

(b) Reinsurance recoverable General business 35,092,421 39,665,977

Reinsurance recoverable Life business 260,131 826,435
35,352,553 40,492,413
See note (ii) below for movement

( c ) Due from reinsurers General business 492,135 39,738

Due from reinsurers Life business - 29,012
492,135 68,750

Total Reinsurance Assets 39,038,453 43,688,887

Current 39,038,453 43,688,887

Non-current - -
39,038,453 43,688,887
(i) The movement in prepaid reinsurance is as follows:

Company Company
31-Dec-19 31-Dec-18
Balance, beginning of the year 3,127,725 3,784,319
Reinsurance Ceeded during the year 18,022,240 15,958,761
Reinsurance Expense during the year (see note 27) (17,956,199) (16,615,355)

Balance, end of year 3,193,766 3,127,725

General Insurance Company Company

31-Dec-19 31-Dec-18
Balance, beginning of the year 2,930,656 3,321,651
Reinsurance Ceeded during the year 17,553,188 15,099,934
Reinsurance Expense during the year (17,393,664) (15,490,929)

Balance, end of year 3,090,180 2,930,656

Life Company Company

31-Dec-19 31-Dec-18
Balance, beginning of the year 197,069 462,668
Reinsurance Ceeded during the year 469,052 858,827
Reinsurance Expense during the year (562,535) (1,124,426)

Balance, end of year 103,585 197,069

(ii) The movement in reinsurance recoverable is as follows:

Company Company
31-Dec-19 31-Dec-18
Balance, beginning of the year 40,492,413 31,404,741
Decrease/increase during the year (see note 29) (5,139,860) 9,087,671
Balance, end of year 35,352,553 40,492,413

General Insurance

Balance, beginning of the year 39,665,977 30,598,261

Decrease/increase during the year (see note 29) (4,573,556) 9,067,716
Balance, end of year 35,092,421 39,665,977
ANNUAL REPORT
& ACCOUNTS 2019 121
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Life

Balance, beginning of the year 826,435 806,480

Decrease/increase during the year (see note 29) (566,304) 19,955
Balance, end of year 260,131 826,435

10 Deferred acquisition costs

Deferred acquisition costs represent commissions on unearned premium relating to the unexpired period of
risks and comprise:
Company Company
31-Dec-19 31-Dec-18

Motor 168,875 141,793

Fire 159,882 161,207
General accident 79,744 61,941
Agric 22,554 32,872
Marine 146,158 129,044
Bond 4,834 3,334
Engineering and Special Risk 243,320 320,878
825,367 851,069

i. The movement in deferred acquisition costs is as follows:

Company Company
31-Dec-19 31-Dec-18
Balance, beginning of year 851,069 548,797
Cost incurred during the year 2,827,756 1,783,496
Amortisation for the year (see( ii ) below) (2,853,458) (1,481,224)

Balance, end of year 825,367 851,069

ii. Analysis of amortization for the year is as follows:

Company Company
31-Dec-19 31-Dec-18
Acquisition cost during the year 2,827,756 1,783,496
Increase/(decrease) in deferred acquisition cost during the year 25,702 (302,272)

Balance, end of year 2,853,458 1,481,224

Current 825,367 851,069

825,367 851,069

11 Other receivables and prepayments

Company Company
31-Dec-19 31-Dec-18

Financial assets:
Accrued interest on statutory deposits 14,439 11,574
Rental income receivable 490,278 539,594
Dividend receivable 217,793 232,784
Receivable from Leadway Holdco & Leadway 130,338 32,440
VIE (see note "I")
852,848 816,392
Non financial assets:
Prepayment (see note "ii" below) 185,128 151,980
Deposit for shares (see note "a" below) 943,462 302,000
Receivable on Claims settled on behalf of Co - Insurers 103,640 111,628
Deposit for purchase of foreign currency - 104,027
Deposit for purchase of Assets - 20,413
Sundry debtors (See note "iii" below) 284,279 147,958
1,516,509 838,006

Gross other receivables 2,369,357 1,654,398

Less: Impairment allowance on:

Financial asset
Rental income receivable (64,851) (64,851)
Dividend receivable (27,928) (27,928)
Receivable from related parties - -
Total Impairment losses on Financial assets (92,779) (92,779)
Non-Financial Assets
Deposit for shares (22,000) (22,000)
Sundry debtors (122,017) (122,017)
Total Impairment losses on Non- Financial assets (144,017) (144,017)
122 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Total Impairment on Financial and Non Financial Assets (236,796) (236,796)

Net other receivables 2,132,561 1,417,602

Current 2,118,122 1,373,588

Non Current 14,439 44,014
2,132,561 1,417,602

i. The amount due from Leadway Holdco & Subdiaries includes Technical Service fees due from Holdco.
ii. Prepayment relates to our advance payments on expenses like rent, advertisement and others
iii. Sundry Debtors represents claims due from co-insurers and payment due from Asset Management Company on our investment
application.

a. Deposit for shares relates to payments made for the acquisition of shares in unquoted companies which had not been allotted as at 31 December 2019.
Detail is shown below.

Company's name 31-Dec-19 31-Dec-18 Nature of business

i FBS Reinsurance Limited 280,000 280,000 Underwriting of risk
ii MV Exchange 22,000 22,000 E- commerce
iii Leadway Vie (reclassified from Financial Assets) 641,462 -
Total 943,462 302,000

Company Company
The movement in deposit for shares is as follows: 31-Dec-19 31-Dec-18

Balance, beginning of year 302,000 2,716,198

Addition 641,462 -
Transfer to Investment in subsidiary upon
- (2,153,425)
allotment of Leadway Vie's equity
Expenses incurred on Acquisition of subsidiary - (14,351)
Refund of unutilized deposit - (246,422)
Transfer to Equity investments on allotment of shares - -
Balance, end of year 943,462 302,000

The addition to deposit represents the carrying value of the Togo bond which was transferred to Leadway Vie as additional investment but was
classified as deposit for shares as at year end pending the issue of shares.

b. The movement in allowance for impairment of other receivable is as follows:

Company Company
31-Dec-19 31-Dec-18
Balance, beginning of year 236,796 236,796
Charge for the year (see note 36) -
Charge for the year on discontinued operations
Distribution of subsidiary - -
Write off - -
Balance, end of year 236,796 236,796

12 Loans and Advances

Company Company
31-Dec-19 31-Dec-18
Gross
Commercial loans 1,229,744 1,314,822
Staff loans 70,487 87,824
Agency loan 47,430 33,270
Loan to policy holders 411,591 310,656
Advance under finance lease - -
1,759,252 1,746,572

Current 643,574 778,835

Non Current 1,115,678 967,737
1,759,252 1,746,572

Specific Impairment allowance on:

- Commercial loans (288,992) (283,933)
- Staff Loans (660) (533)
- Agency loans (1,731) (1,720)
- Mortgage loan - -
- Policy holders loans (33,371) (22,656)
Collective Impairment - Loans (31,703) (42,166)
(356,457) (351,008)

Net Loans and advances 1,402,795 1,395,564

 ANNUAL REPORT
& ACCOUNTS 2019 123
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

(i) The movement in allowance for impairment of loans is as follows:

Company Company
31-Dec-19 31-Dec-18
Balance, beginning of year (a) 351,008 373,789

Charge/ (credit) for the year : (see note 36)

- Commercial loans (2,034) (34,371)
- Staff Loans 185 486
Mortgage loans
- Agency loans 222 980
- Policy holders loans 7,077 10,125
Advance under finance lease - -
Charge to discontinued operations
Write off : - -
- Staff Loans
- Agency loans - -
- Policy holders loans - -
Derecognition of distributed subsidiaries - -
Subtotal (b) 5,450 (22,781)

Balance, end of year (a+b) 356,457 351,008

Collective impairment was recorded for all loans and advances which are not specifically impaired in recognition
of the credit risk inherent in all loans

(ii) Movement in loans and advances is as follows:

Company Company
31-Dec-19 31-Dec-18

Balance beginning of year 1,395,564 1,065,407

Additional loans granted 508,760 853,120
Loan repayment received (616,160) (630,072)
Accrued interests 162,304 154,337
Interests received - (70,009)
Impairment writeback/ (charge) (5,450) 22,781
Reclassification to bad debt (42,222)
Derecognition of distributed subsidiaries - -
Balance end of year 1,402,795 1,395,564
124 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

(i)Fair values of land and buildings

On a determined basis, the Company engages the services of external, independent and qualified valuers to determine the fair value of the company's land and buildings. As at 31 December
2019, the fair values of the land and buildings have been determined by Diya Fatimilehin & Co., Estate Surveyor and Valuers (FRC/2013/NIESV/00000002773). See note 13.4b for the
analysis of the fair valuation method used for land and building.

Consequent to the revaluation of the Company's land and buildings at 31 December 2019, the accumulated depreciation at that date was eliminated against the gross carrying amount of the
properties and the net amount restated to the revalued amount.

(ii)The Company had no capital commitments as at the balance sheet date (31 December 2019: Nil).
(iii)No borrowing cost was capitalised as borrowing liability does not relate to purchase of property and equipment.
(iv)The company did not recognise any lease liability for the period as management has determined that there is no economic incentive that will significantly influence or reasonably ascertain
renewals of any of it's leased rental properties

13.2 Company - 2019

Office Computer Furniture & Motor Capital Work Right of
Land Building equipment equipment fittings vehicles In Progress Asset Use Total
Cost or valuation
Balance, beginning of year 518,692 1,738,075 607,154 1,210,857 531,994 1,372,083 470,136 - 6,448,991
Additions - 60,984 62,187 16,700 281,833 777,493 191,040 1,390,236
Revaluation surplus/(deficit) 10,231 51,178 - - - - - 61,409
Reclassification to investment
property
- - - - - - - -
Reclassification from investment
property - - -
Write off - - - - -
Disposals - (19,937) (502) - (18,012) - (38,451)
Reversal of accumulated depreciation
due to revaluation - (41,971) (41,971)
Balance, end of year 528,923 1,747,282 648,200 1,272,542 548,694 1,635,904 1,247,629 191,040 7,820,213

Accumulated depreciation
Balance, beginning of year - - 533,229 1,031,020 506,957 949,690 3,020,896
Charge for the year - 41,971 34,894 13,507 203,861 - 65,099 457,721
Reversal of accumulated depreciation
due to revaluation - (41,971) - - - - (41,971)
Disposals - - (19,937) (120) - (8,441) (28,499)

Balance, end of year - - 548,186 1,129,287 520,464 1,145,110 - 65,099 3,408,147

Net book value end of year 528,923 1,747,282 100,014 143,254 28,230 490,794 1,247,629 125,941 4,412,066

Net book value beginning of year 518,692 1,738,075 73,925 179,837 25,037 422,393 3,428,095
ANNUAL REPORT
& ACCOUNTS 2019 125
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

13.4 Company - 2018

Office Computer Furniture Motor
Land Building equipment equipment & fittings vehicles Total

Cost or valuation
Balance, Beginning of year 912,209 2,283,048 566,271 1,000,536 524,234 1,260,388 - 6,546,686
Additions - - 40,883 210,321 7,760 156,727 - 415,691
Revaluation surplus/(deficit) 10,116 81,660 - - - - 91,776
Reclassification to investment pr (393,633) (425,712) - - - - (819,345)
Reclassification from investment property 470,136 470,136
Write off - - - - - -
Disposals (10,000) (137,780) - - - (45,032) - (192,812)

Reversal of accumulated
depreciation due to revaluation - (63,141) (63,141)
Balance, end of year 518,692 1,738,075 607,154 1,210,857 531,994 1,372,083 470,136 6,448,991
-
Accumulated depreciation -
Balance, beginning of year 500,819 924,084 487,192 805,652 2,717,747
Charge for the year - 63,141 32,410 106,936 19,765 175,580 397,832

Reversal of accumulated -
depreciation due to revaluation - (63,141) - - 63,141
Disposals - (31,542) (31,542)

Balance, end of year - - 533,229 1,031,020 506,957 949,690 3,020,896

-
Net book value end of year 518,629 1,738,075 73,925 179,837 25,037 422,393 470,136 3,428,095

Net book value beginning

of year 912,209 2,283,048 9 65,452 76,452 37,042 454,736 3,828,939

(b) Non financial instruments measured at fair value

The following table sets out fair values of non financial instruments measured at fair value and analyses them by level in the fair value hierarchy into which each
fair value measurement is categorised
126 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Company
31 December 2019

All amounts are in thousands of Naira unless otherwise stated

Assets Level 1 Level 2 Level 3 Total
Property and equipment
- Land - 528,923 528,923
- Building - 1,747,282 1,747,282

Total - 2,276,205 - 2,276,205

Company
31 December 2018

All amounts are in thousands of Naira unless otherwise stated

Assets Level 1 Level 2 Level 3 Total
Property and equipment
- Land - 518,692 518,692
- Building - 1,738,075 1,738,075

Total - 2,256,767 - 2,256,767

There were no transfers between levels 1 and 2 during the year

Valuation techniques used to derive level 2 fair values

Level 2 fair values of land and buildings have been derived using the market valuation approach.
Sales prices of comparable land and buildings in close proximity are adjusted for differences in key
attributes such as property size and age.
ANNUAL REPORT
& ACCOUNTS 2019 127
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

14 Investment properties
Company Company
31-Dec-19 31-Dec-18

Office property 14,061,978 12,469,091

Residential property 3,137,046 3,945,352

17,199,024 16,414,443

Non Current 17,199,024 16,414,443

(a) The movement in investment properties during the year is shown below:
Company Company
31-Dec-19 31-Dec-18

Balance, beginning of the year 16,414,443 14,963,765

Reclassification to Property & Equipment - (470,136)
Reclassification from Property & Equipment - 819,345
Transfer from other assets - 210,838
Acquisition from loan customer - 49,162
Additions during the year 576,704 430,509
Acquisition during the year through newly acquired subsidiaries - -
Fair value gain (see note 32) 207,877 410,960
Disposals by subsidiary - -
As at end of the year 17,199,024 16,414,443

The analysis of investment properties is as follows:

Company Company
31-Dec-19 31-Dec-18

Thomas Wyatt House ** (See note "c" below) 1,441,933 1,438,161

Cadastral Property, Abuja 2,842,998 2,812,329
Bedwell, Ikoyi I 1,787,721 1,786,664
George Street Ikoyi Property ** 878,128 877,687
Ozumba Mbadiwe Property 1,160,916 1,160,516
Abeokuta property - Oke Ilewo 140,004 140,004
Enugu Landed property 52,107 46,160
Aerodrome Road, Apapa ** 240,770 215,500
Warehouse Road Apapa ** 431,729 425,350
Onike Road, Sabo Yaba ** 183,188 179,300
Alfred Rewane Road (Marble House) ** 6,924,648 6,237,935
Funsho Williams Av. - Old Corporate Office 835,796 831,637
Plot 802 Cadastral Zone Bo2, Durumi 114,254 100,000
Sangotedo scheme, Lekki sub-region 164,832 163,200
Cocody Besiko - Cote de voire -
Others - -
17,199,024 16,414,443

(b) The Company's investment properties are held for the purpose of capital appreciation and rental income generation under
perating lease arrangements (All leases are cancellable). The Company's investment properties were revalued by Diya
Fatimilehin & Co, Estate Surveyors and Valuers (FRC/2013/NIESV/00000002773) using the Comparative approach
method of valuation to arrive at the open market value as at 31 December 2019. Fair value gains have been recognized in the
income statement in line with the fair value model of IAS 40. Rental income on investment property included in the statement
of comprehensive income for the year is N761.251million (2018: N933.62 million); and N754.36 million (2018: N928.1
million) for company and company respectively. The titles of most of the goup's properties are fully perfected.
128 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

(c) The Thomas Wyatt House property is subject of an ongoing litigation. Our Legal experts are of the view that Leadway Assurance Company has a high probability of
success based on the facts of the case and that there is no other encumbrance to the full realization of the property. There is no income being realized from the
property.

DISPOSAL via FAIR VALUE

BAL. B/F ADDITION RECLASSIFICATION GAIN/(LOSS)ON CLOSING
(d) DESCRIPTION ON REVALUATION BALANCE

THOMAS WYATT HOUSE 1,438,161 - - 3,772 1,441,933

ABUJA CADASTRAL OFFICE 2,812,329 6,268 - 24,401 2,842,998
BEDWELL ROAD IKOYI 1,786,664 - 1,057 1,787,721
GEORGE STR-AMCON (Undeveloped Landed property) 877,687 19,376 - (18,935) 878,128
OZUMBA MBADIWE-AMCON (Undeveloped Landed property) 1,160,516 - 400 1,160,916
ABEOKUTA PROPERTY (Undeveloped Landed property) 140,004 24 - (24) 140,004
ENUGU LANDED PROPERTY (Undeveloped Landed property) 46,160 - 5,947 52,107
Property in Apapa -Aerodrome road 215,500 - 25,270 240,770
Property in Apapa - Warehouse road 425,350 - 6,379 431,729
No. 2, Onike Road (4A, Industrial Avenue), Sabo, Yaba, Lagos. 179,300 - 3,888 183,188
Marble House Ikoyi 6,237,935 521,253 - 165,460 6,924,648
FUNSHO WILLIAMS AVENUE PROPERTY 831,637 29,783 - (25,624) 835,796
ASO 1-Plot 802, Cadastral Zone B02, Durumi Distric 100,000 - 14,254 114,254
ASO 2- Sangotedo scheme, Lekki sub - region, Eti o 163,201 1,632 164,833

Total 16,414,444 576,704 - 207,877 17,199,025

i. Additions above relates to enhancement of our existing properties during the year

(e) These are properties with titles yet to be fully perfected but which are at advanced stages of perfection. The delay is due to the length of time it takes to complete
the statutory procedures for perfection in the normal course of business. There are no encumberances on these properties . Estimated cost of perfecting the title
of these properties is put at N100million.
ANNUAL REPORT
& ACCOUNTS 2019 129
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

(f) Non financial instruments measured at fair value

The following table sets out fair values of non financial instruments measured at fair value and analyses them by level in the fair
value hierarchy into which each fair value measurement is categorised

Company
31 December 2019
All amounts are in thousands of Naira unless otherwise stated
Assets Level 1 Level 2 Level 3 Total
Investment properties
- Office property - 14,061,978 - 14,061,978
- Residential property - 3,137,046 - 3,137,046
Total - 17,199,024 17,199,024

Company
31 December 2018
All amounts are in thousands of Naira unless otherwise stated
Assets Level 1 Level 2 Level 3 Total
Investment properties
- Office property - 12,469,091 - 12,469,091
- Residential property - 3,945,352 - 3,945,352
Total - 16,414,443 - 16,414,443

There were no transfers between levels 1 and 2 during the year

Valuation techniques used to derive level 2 fair values

Level 2 fair values of land and buildings have been derived using the market valuation approach. Sales prices of comparable land
and buildings in close proximity are adjusted for differences in key attributes such as property size and age.
 130 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

15 Investment in subsidiary Company Company

31-Dec-19 31-Dec-18
(a) The Company's investment in subsidiary is as stated below:
Leadway Vie (note v) 2,153,425 2,153,425
2,153,425 2,153,425

(b) Nature of investments in subsidiary Nature of Country of Proportion of Proportion of

Name of entity business incorporation ordinary ordinary
shares shares held by
directly held non-
by controlling
parent/ interest (%)
Company (%)

Leadway Vie (note v) Life Insurance Cote d'iVoire 99.99% 0.01%

ANNUAL REPORT
& ACCOUNTS 2019 131
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

(c ) Acquisition of subsidiary

(i) Identifiable assets acquired and liabilities assumed

In 2018, the company acquired Leadway VIE, Cote D'voire, the following table summarises
the recognised amounts of assets acquired and liabilities assumed at the date of acquisition:

N'000 N'000

Carrying
amounts Fair value

Cash and cash equivalent 2,230,307 2,230,307

Other receivables and prepayments 377,683 31,953

Investment securities 141,230 141,230

Property and equipment 82,796 82,796
Investment property 750,406 1,300,629
Other liabilities (2,122,054) (2,122,054)
Current tax liability (21,953) (21,953)
Insurance contract liabilities (2,223,228) (2,223,228)

Total identifiable net assets/

liabilities acquired (784,813) (580,320)

(ii) Acquisition related costs

The Company incurred acquisition related costs of CFA 20million (N11 million) on legal fees. This cost
was included in 'other expenses' in FY 2018.

(iii) Goodwill
Goodwill arising from the acquisition has been recognised as follows:
N'000
Cash consideration transferred 1,069,436

NCI, based on the proportionate interest in the recognised

amounts of the assets and liabilities of 3AVie (now Leadway Vie) (58)

Fair value of identifiable net assets/liabilities 580,320

Goodwill 1,649,698
132 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

The table below summarises the financial information of all the Parent's subsidiaries before any intra-Company elimination.

In thousand of Naira Leadway Vie Leadway Properties Leadway Pensure PFA Leadway Hotel Limited Leadway Capital & Trust
Limited
Dec. 2019 Dec. 2018 Dec. 2019 May 2018 Dec. 2019 May 2018 Dec. 2019 May 2018 Dec. 2019 May 2018
(12 months) (9 months) (12 months) (5 months) (12 months) (5 months) (12 months) (5 months) (12 months) (5 months)
Assets
Cash and cash equivalent 839,415 688,559 - 205,103 - 788,506 - 31,127 - 439,603
Other receivables and prepayments 110,418 420,146 - 201,884 - 1,503,834 - 95,148 - 2,953,386
Investment securities 398,696 417,519 - 20,082 - 3,235,606 - - - 250,276
Deferred tax asset - - - 7 - - - 27,009 - -
Property and equipment 149,597 157,131 - - - 407,065 - 2,518,140 - 3,635
Intangible assets 3,976 1,355 - - - 75,712 - - - 8,960
Investment property 1,268,425 2,682,004 - - - 673,781 - - - -
Investment in subsidiary - - - 158,895 - - -
Total Assets 2,770,527 4,366,714 - 585,971 - 6,684,504 - 2,671,424 - 3,655,860

Liabilities
Other liabilities 920,612 260,603 - 33,945 - 854,938 - 623,515 - 1,621,817
Borrowings - - - 222,336 - - - 308,592 - 799,598
Current tax liability 25,051 57,741 - 18,152 - 560,163 - 16,439 - 118,919
Deferred tax liability - - - - - 37,245 - - - -
Investment contract liabilities 1,613,275 - - - - - - - - -
Insurance contract liabilities 321,406 2,025,517 - 940
Total liabilities 2,880,344 2,343,861 - 274,433 - 1,452,346 - 948,546 - 2,541,275

Capital and reserves

Share capital 1,900,201 1,900,201 - 2,025 - 1,642,361 - 109,999 - 440,000
Retained earnings (1,842,803) 115,056 - 311,532 - 2,762,165 - (26,340) - 674,585
Share premium - - - - - 53,465 - 1,127,662 - -
Depoosit for shares - - - - - - - - - -
Translation reserves (176,041) - - - - - - - - -
Other reserves 8,826 7,596 - (2,020) - 774,166 - 511,557 - -

Total equity (109,817) 2,022,853 - 311,537 - 5,232,157 - 1,722,878 - 1,114,585

Total Liabilities and Equity 2,770,527 4,366,713 - 585,971 - 6,684,504 - 2,671,424 - 3,655,860
- 0

Leadway Vie Leadway Properties Leadway Pensure PFA Leadway Hotel Limited Leadway Capital & Trust
Limited
Dec. 2019 Dec. 2018 Dec. 2019 Dec. 2018 Dec. 2019 Dec. 2018 Dec. 2019 Dec. 2018 Dec. 2019 Dec. 2018
(12 months) (9 months) (9 months) (12 months) (9 months) (12 months) (9 months) (12 months) (9 months)

Revenue (146,817) 2,289,218 - 30,019 - 2,316,140 - 238,793 - 400,195

Profit/(loss) before income tax (1,658,922) 1,060,341 58,495 - 1,130,225 - (140,313) - 225,860
Income tax expense/income (1,843) (39,964) (19,829) - - - (7,393) - (57,594)

Profit after tax (1,660,765) 1,020,377 - 38,666 - 1,130,225 - (147,706) - 168,266

Other comprehensive income - - - 1,531 - - - - - -
Total comprehensive income (1,660,765) 1,020,377 - 40,197 - 1,130,225 - (147,706) - 168,266
ANNUAL REPORT
& ACCOUNTS 2019 133
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

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

The movement on deferred tax account during the year was as follows:

Company Company
31-Dec-19 31-Dec-18

Balance, beginning of year - 286,446

Distribution of subsidiary - -
(Charge) / credit to income statement - (286,446)
- -

The movement in deferred tax liabilities account during the year was as follows:

Balance, Beginning of year (1,883,284) (693,427)

Distribution of subsidiary - -
(Charge) / credit to income statement - (1,189,857)
(1,883,284) (1,883,284)

Net Deferred Tax Liabilities (See note "16.1" below) (1,883,284) (1,883,284)

Net deferred tax liability is attributable to the following:

Company Company
31-Dec-19 31-Dec-18

Property and equipment (44,594) 201,668

Other Non-Current Assets and liabilities (551,718) (1,328,887)

Unrealised exchange difference 184,876 303,652

Unrecouped tax losses - -
Net deferred tax liabilities - Life Business (411,436) (823,567)

Property and equipment (447,958) (86,448)

Other Non-Current Assets and liabilities (105,089) (245,216)

Unrealised exchange difference (918,800) (912,929)

Unrecouped tax losses - 184,876
Net deferred tax liabilities - General Business (1,471,848) (1,059,717)

Net Deferred Tax Liabilities (1,883,284) (1,883,284)

134 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

The Company did not recognise deferred income tax assets of N65billion (2018: N32billion ) in respect of unrecouped losses
amounting to N217billion (2018: N107billion) that can be carried forward against future taxable income. 95% of the unrecognised
deferred tax and unrecouped losses is from the life business results.

16.1 Movements in temporary differences during the year ended 31 December 2019

Company
Balance at 1 Recognised in Recognised in Balance at 31
January profit or loss other December
comprehensive
income

Property and equipment 115,220 (607,772) - (492,552)

Distribution of subsidiary
Other non current assets (1,574,103) 917,295 - (656,808)
Unrealised exchange gain (609,277) (124,647) - (733,924)
Unrecouped tax losses 184,876 (184,876) -

(1,883,284) (0) - (1,883,284)

Movements in temporary differences during the year ended 31 December 2018

Company
Balance at 1 Recognised in Recognised in Balance at 31
January profit or loss other December
comprehensive
income

Property and equipment (951,205) 1,066,425 - 115,220

Distribution of subsidiary
- - - -
Other non current assets (79,164) (1,494,939) (1,574,103)
Unrealised exchange gain (2,487,917) 1,878,640 - (609,277)
Unrecouped tax losses 3111306.5 (2,926,430.50) 184876
(406,980) (1,476,304) - (1,883,284)

16.2 Analysis of amount of deferred tax recognised in profit or loss

Company Company
31-Dec-19 31-Dec-18

Deferred tax from continuing operations (0) (1,476,304)

ANNUAL REPORT
& ACCOUNTS 2019 135
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

17 Intangible assets
In thousands of Naira
Company
Software Work in Total
31 December 2019 Progress
Cost
Balance, beginning of year 1,091,910 79,054 1,170,964
Additions to goodwill on subsidiary acquired in the year - - -
Addition to other intangible assets 60,708 - 60,708
Reclassification to other assets 79,054 (79,054) -
Balance, end of year 1,231,672 - 1,231,672

Accumulated amortization
Balance, beginning of year 915,625 - 915,625
Amortization 153,599 - 153,599
Balance, end of year 1,069,224 - 1,069,224

Carrying amount
As at end of year 162,448 - 162,448
As at beginning of year 176,285 - 255,339

31 December 2018
Cost
Balance, beginning of year 1,094,654 52,046 1,146,700
Additions to goodwill on subsidiary acquired in the year - - -
Addition to other intangible assets - 27,008 27,008
Reclassification to other assets (2,744) - (2,744)
Derecognition on distribution of non insurance subsidiaries - - -
Balance, end of year 1,091,910 79,054 1,170,964

Accumulated amortization
Balance, beginning of year 753,816 - 753,816
Amortization 161,809 - 161,809
Amortization on discontinued operations - - -
Balance, end of year 915,625 - 915,625

Carrying amount
As at end of year 176,285 79,054 255,339
As at beginning of year 340,838 52,046 392,884

Impairment test of goodwill

Goodwill is reviewed annually for impairment, or more frequently when there are indications that impairment may have
occurred. Impairment assessment has been performed for the period, and no impairment losses on goodwill was
recognized during the period under review as the recoverable amount of Goodwill as at 31 December 2019 was greater
than its carrying amount and is thus not impaired.
The recoverable amount was determined using a value-in-use computation.
Goodwill is monitored by the Company on an entity by entity basis
The key assumption used in computing the value-in-use for goodwill in 2019 are as follows:
136 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Cash Flow Forecast

Cash flows were projected based on past experience of operating results. These cashflows are based on the
expected revenue growth for the entity over a 5 year period.

Discount Rate

Pre-tax discount rate of 11.1% (2018:11.9%) was applied in determining the recoverable amounts for the entity with
goodwill (Leadway Vie Ltd). This discount rate was estimated using the risk-free rate using the average yeild on
Ivorian goverment long term bond, equity risk premium and appropriate Beta.

Longterm term growth rate

The key assumptions described above may change as economic and market conditions change. The Company
estimates that reasonably possible changes in these assumptions are not expected to cause the recoverable amount
of the subsidiaries (from which the goodwill arose) to decline below their carrying amount.

18 Statutory deposits

This represents the Company's deposit with the Central Bank of Nigeria as at 31 December 2019, in compliance
with the Insurance Act, CAP 117 LFN 2004. This amount is not available for the day-to day use in the working capital
of the Company and is therefore excluded from cash and cash equivalents. Analysis of statutory deposits is as shown
below:

Company Company
31-Dec-19 31-Dec-18
General Insurance Business 300,000 300,000
Life Business 200,000 200,000

500,000 500,000

Non Current 500,000 500,000

500,000 500,000
Income on statutory deposit is recognized in investment income
ANNUAL REPORT
& ACCOUNTS 2019 137
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)
19 Trade payables
Company Company
31-Dec-19 31-Dec-18

Reinsurance payable 1,388,075 463,810

Insurance payable 1,644,328 2,002,069
Claims Deposit 162,149 98,315
Agent Commssion Payable (paid in January 2020) 138,708 306,487
Premium deposits (see note 'a' below) 6,102,664 8,358,781
Matured and surrendered policy payable (see note 'c' below) 254,199 344,342
9,690,123 11,573,804

Current 9,690,123 11,573,804

Non Current - -
9,690,123 11,573,804

a. The movement in premium deposit is as follows: Company Company

31-Dec-19 31-Dec-18
Balance, beginning of year 8,358,781 9,391,509
Addition during the year (6,747,694) 7,349,516
Transfer to premium income 4,491,577 (8,382,244)
Balance, end of year 6,102,664 8,358,781

Premium deposit represents premium received in advance but which the policy risk period is yet to commence as at reporting date.

b. Claims deposit relates to claim amounts received from other insurance companies as their proportion on claims due to insured.

c. Matured and surrendered policy payable represents policies that has matured and undergoing settlement processes to the policy
holders as at the reporting date majority of whom has been settled in the subsequent year.

20 Current income tax liabilities

The movement on current income tax liabilities during the year was as follows:
Company Company
31-Dec-19 31-Dec-18
Balance, beginning of year 1,083,948 1,119,536
Charge for the year (see note (a) below) 434,750 753,157
Payments during the year (659,196) (788,745)
Acquired from subsidiaries - -
Derecognition of balance of residual distributed entity - -
Balance, end of year 859,502 1,083,948
-
(a) Analysis of charge for the year is as follows:
Company Company
31-Dec-19 31-Dec-18
- Current year's income tax provision 434,750 638,474
- Withholding tax on dividend income - 114,683
- Tax paid arising from back duty assessment - -
434,750 753,157

21 Other liabilities
Company Company
31-Dec-19 31-Dec-18
Financial liabilities:
Sundry creditors 154,757 190,103
Stamp duties payable - 94,579
Elfina Project payable - 35,824
Due to employees - 968,400
Accrued audit fee 49,500 30,000
Accrued consultancy fee 341,142 264,616
Staff profit sharing payable 682,106 675,000
Insurance supervisory fee payable 875,400 807,515
NCDF Levy 719,510 629,951
2,822,414 3,695,988
Non-financial liabilities:
Deferred rental income 1,560 346,668
Unearned income 379,949 442,101
Withholding tax payable 438,881 471,224
Premium suspense (see note 'b' below) 230,264 239,756
Agency provident fund 33,337 -
PAYE deductions 15,982 35,959
Pension deduction - 13,774
NHF, Staff Cooperative and other statutory deductions 3,946 29,792
Office rent payable 155,965 16,348
VAT payable 51,637 150,417
Other creditors 405,889 185,946
1,717,409 1,931,985

Total other liabilities 4,539,823 5,627,973

Current 4,153,957 14,092,368

Non Current 385,866 545,215
4,539,823 5,627,973

a. Premium suspense represents premium paid into the Company's bank account by customers which are yet to be matched with
specific policies as at the reporting date due to unavailability of relevant policy information. This is usually reconciled and matched
with appropriate policies on a regular basis.

b. Unearned income relates to commission received on premium ceded to reinsurer which has not been earned due to time apportionment
138 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

22 Insurance contract liabilities

Company Company
31-Dec-19 31-Dec-18
Gross
Claims reported and loss adjustment payable
(see note 22.1 below) 47,239,571 56,789,173
Claims incurred but not reported - IBNR (see
note 22.1 below) 14,603,602 9,648,192
Unearned premium (see note 22.2 below) 10,313,508 8,571,621
Life fund (see note 22.3 below) 224,547,452 150,428,171

296,704,133 225,437,157
-
Reinsurance receivables
Prepaid reinsurance (see note 9a) 3,193,766 3,127,725
Claims reported & loss adjustment payable and
IBNR (see note 9b) 35,352,553 40,492,412

Total reinsurers' share of insurance liabilities 38,546,319 43,620,137

Net insurance contract liability 258,157,814 181,817,020

Current (Gross) 72,156,681 92,008,986

Non-current (Gross) 224,786,922 133,428,171
296,943,603 225,437,157

Outstanding claims represents the estimated cost of settling all claims arising from incidents occurring as at the reporting date.
The liability adequacy test for outstanding claims liability as at 31 December 2019 and the comparative periods were done by
Ernst &Young Nigeria Limited (FRC/2012/NAS/00000000738).

22.1 Analysis of gross benefit and claims expenses

Company Company
31-Dec-19 31-Dec-18
General Insurance (see note 22.1d) 44,723,000 54,314,985
Life (see note 22.1d) 2,516,571 2,474,188
47,239,571 56,789,173
Claims incurred but not reported
Company Company
31-Dec-19 31-Dec-18
General Insurance 13,294,960 8,320,901
Life 1,308,642 1,327,291

14,603,602 9,648,192

61,843,173 66,437,365

(a) The aging analysis of claims reported and loss adjusted for general insurance contracts

Company Company
31-Dec-19 31-Dec-18
Days
0 - 90 5,868,456 4,113,000
91- 180 630,505 8,597,280
181 - 270 1,647,772 15,142,587
271 - 365 850,560 204,165
366 and above 35,725,707 26,257,953
44,723,000 54,314,985

(b) The aging analysis of claims reported for life insurance contracts

Company Company
31-Dec-19 31-Dec-18
Days
0 - 90 466,149 439,083
91- 180 206,434 141,313
181 - 270 184,418 87,057
271 - 365 214,164 1,439,475
366 and above 1,445,405 367,260
2,516,571 2,474,188

Outstanding claims above 90 days are those that are awaiting relevant documentations to facilitate settlement. Sufficient funds
has been set aside to meet these obligations.

(c) Movement in outstanding claims provision inclusive of IBNR:

Company Company
31-Dec-19 31-Dec-18

Balance, beginning of year 66,437,365 54,905,849

Less movement:
- Claims incurred during the year 9,289,156 37,599,015
- Claims paid during the year (see note 29) (13,883,348) (26,067,499)
Net movement in the year (4,594,192) 11,531,516

Balance, end of year 61,843,173 66,437,365

ANNUAL REPORT
& ACCOUNTS 2019 139
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

(d) Company analysis of claims reported and IBNR by class:

Company
31-Dec-19
Claims reported IBNR Total
General Insurance:
Motor 555,171 894,942 1,450,113
Fire 974,948 1,265,935 2,240,883
General accident 841,443 215,535 1,056,978
Marine 868,262 401,395 1,269,657
Agric 165,279 44,356 209,635
Bond 276,331 365,832 642,163
Engineering 259,167 242,357 501,524
Special risk 40,782,399 9,864,608 50,647,007
44,723,000 13,294,960 58,017,960

Life:
Company life 2,285,465 1,308,642 3,594,107
Individual life 32,401 - 32,401
Annuity 198,705 - 198,705
2,516,571 1,308,642 3,825,213

Total claims 47,239,571 14,603,602 61,843,173

Included in “claims reported and loss adjustment payable” for the year is N50.09million (2018:N187.3m) representing
insurance claims which are subject of ongoing litigations. The provision charged is recognised in “claims and loss
adjustment expense”. In the Directors’ opinion, the outcome of these legal claims will not give rise to any significant loss
beyond the amounts provided as at 31 December 2019.

Company 31-Dec-18
Claims reported IBNR Total
General Insurance:
Motor 799,826 261,116 1,060,942
Fire 2,117,713 592,595 2,710,308
General accident 713,074 201,580 914,654
Marine 746,719 29,769 776,488
Agric - - -
Bond 885,526 22,163 907,689
Engineering 244,849 225,707 470,556
Special risk 48,807,278 6,987,971 55,795,249
54,314,985 8,320,901 62,635,886
Life:
Company life 2,179,573 1,327,291 3,506,864
Individual life 110,832 - 110,832
Annuity 183,783 - 183,783
2,474,188 1,327,291 3,801,479

Total claims 56,789,173 9,648,192 66,437,365

140 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

22.2 Unearned premium

Company analysis of unearned premium by class:

Company Company
31-Dec-19 31-Dec-18
General Insurance
Motor 1,370,040 1,168,649
Fire 1,067,747 971,189
General accident 468,601 418,190
Marine 131,707 871,663
Agric 661,129 -
Bond 44,456 20,479
Engineering 244,984 391,232
Special risk 4,637,496 3,698,264
8,626,160 7,539,666
Life
Company life 1,687,347 1,031,957

10,313,507 8,571,623

Movement in unearned premium is as follows:

Company Company
31-Dec-19 31-Dec-18

Balance, beginning of the year 8,571,621 8,789,131

Increase during the year 1,741,887 (217,510)

Balance, end of year 10,313,508 8,571,621

22.3 Analysis of life fund is as follows:

Company Company
31-Dec-19 31-Dec-18
Individual life 4,111,418 3,117,938
Annuity 220,436,034 147,310,233

224,547,452 150,428,171

(i) The movement on the life insurance liability during the year was as follows:

Company - 2019 Company

Individual life Annuity Total
Balance, beginning of year 3,117,938 147,310,233 150,428,171
Acquired from subsidiary - - -
Reclassification of DA - - -
Addition/reduction during the year 993,480 73,125,801 74,119,281

Balance, end of year 4,111,418 220,436,034 224,547,452

Company - 2018
Individual life Annuity Total
Balance, beginning of year 2,997,755 117,289,811 120,287,566
Acquired from subsidiary - - -
Addition during the year 120,183 30,020,422 30,140,605

Balance, end of year 3,117,938 147,310,233 150,428,171

(ii) The movement in Annuity fund during the year was as follows:

Company Company
31-Dec-19 31-Dec-18
Balance, beginning of year 147,310,233 117,289,811
Premiums received during the year 48,404,850 51,764,070
Payments during the year (29,066,230) (22,308,814)
Changes in actuarial valuation 53,787,180 565,166

Balance as at 31 December 220,436,034 147,310,233

ANNUAL REPORT
& ACCOUNTS 2019 141
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

22.4 Claims development tables

The claims development table provides a measure of the Company's ability to estimate the ultimate value of claims. The top half of
each table below illustrates how the Company’s estimate of total claims outstanding for each year has changed at successive year-
ends. The bottom half of the table reconciles the cumulative claims to the amount appearing in the consolidated statement of
financial position.

MOTOR Table of claims paid excluding large claims (Attritional Table)

Accident
Year 1 2 3 4 5 6 7 8 9 10 11
2007 - 201,283 28,568 6,997 3,493 3,640 - - - - -
2008 853,038 421,486 72,016 18,286 5,934 4,180 - - 704 - -
2009 744,027 497,530 55,340 11,042 1,626 2,709 - 1,497 - - -
2010 758,364 471,609 65,663 13,725 6,279 635 4,042 1,124 - - -
2011 839,901 406,306 39,577 3,506 13,070 3,193 9,058 - - - -
2012 894,025 505,792 24,724 13,153 10,034 2,831 - 502 - - -
2013 907,835 612,597 23,085 38,907 4,518 - - - - - -
2014 963,872 390,059 85,746 36,049 8 6,429 - - - - -
2015 1,190,393 402,538 53,877 6,457 560 - - - - - -
2016 1,296,782 310,620 2,446 2,000 - - - - - - -
2017 1,155,119 317,446 17,930 - - - - - - - -
2018 1,456,138 317,759
2019 1,568,319 - - - - - - - - - -

MOTOR Table of inflated adjusted claims paid excluding large claims (Attritional Table)
Accident
Year 1 2 3 4 5 6 7 8 9 10 11
2007 - 687,626 85,685 18,772 8,497 7,905 - - - - -
2008 2,914,161 1,264,167 193,202 44,476 12,886 8,405 - - 1,007 - -
2009 2,231,567 1,334,747 134,600 23,979 3,270 5,029 - 2,141 - - -
2010 2,034,497 1,147,061 142,596 27,598 11,659 1,076 5,779 1,392 - - -
2011 2,042,830 882,346 79,580 6,509 22,140 4,565 11,226 - - - -
2012 1,941,492 1,017,030 45,904 22,281 14,346 3,509 - 502 - - -
2013 1,825,447 1,137,388 39,106 55,630 5,599 - - - - - -
2014 1,789,589 660,775 122,600 44,676 9 6,429 - - - - -
2015 2,016,572 575,553 66,772 7,191 560 - - - - - -
2016 1,854,151 384,959 2,724 2,000 - - - - - - -
2017 1,431,568 353,540 17,930 - - - - - - - -
2018 1,615,113 317,759 - - - - - - - - -
2019 1,568,319 - - - - - - - - - -

MOTOR Combined results table (Attritional and Large Losses)

Accident Latest Paid Gross claims Gross Earned Ultimate
Year Paid to date Large Loss Total Ultimate reserve Premium Loss ratio
2007 808,485 - 808,485 - 3,459,782 23%
2008 4,438,304 102,653 4,540,957 - 3,459,782 131%
2009 3,735,331 71,251 3,806,582 - 3,459,782 110%
2010 3,371,657 60,074 3,431,731 - 4,005,126 86%
2011 3,049,196 35,858 3,085,054 - 4,005,126 77%
2012 3,045,064 40,776 3,086,050 210 3,961,399 78%
2013 3,063,170 142,092 3,214,799 9,537 3,248,131 99%
2014 2,624,078 137,190 2,779,140 17,871 3,465,694 80%
2015 2,666,647 230,991 2,904,961 7,322 2,954,417 98%
2016 2,243,834 301,767 2,611,359 65,757 2,819,910 93%
2017 1,803,038 172,073 2,118,142 143,031 2,963,988 71%
2018 1,932,872 176,694 2,301,759 192,193 3,434,077 67%
2019 1,568,319 126,794 2,709,462 1,014,349 3,856,002 70%
Total 34,349,995 1,598,213 37,398,481 1,450,270 45,093,216
142 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

ENGINEERING Table of claims paid excluding large claims (Attritional Table)

Year 1 2 3 4 5 6 7 8 9 10 11 12
2007 - 32,204 9,310 270 - - 722 - - - - -
2008 7,021 35,216 20,787 378 6,761 206 72 20 - - - -
2009 40,790 55,128 17,683 285 575 116 319 1,713 - - - -
2010 23,720 38,788 2,791 3,885 1,188 15 1,817 - - 1,745 - -
2011 20,311 56,873 43,413 7,612 3,053 - - - - - - -
2012 31,107 47,004 8,616 1,806 1,575 - - 386 - - - -
2013 40,346 115,740 16,278 2,690 1,158 - 18 - - - - -
2014 85,778 52,129 36,809 5,793 131 3 - - - - - -
2015 57,143 54,315 2,835 5,159 397 - - - - - - -
2016 51,127 41,192 11,300 4,625 - - - - - - - -
2017 55,758 41,346 3,364 - - - - - - - - -
2018 54,241 47,642 - - - - - - - - - -
2019 50,983 - - - - - - - - - - -

ENGINEERING Table of inflated adjusted claims paid excluding large claims (Attritional Table)
Accident
Year 1 2 3 4 5 6 7 8 9 10 11 12
2007 - 110,017 27,925 724 - - 1,452 - - - - -
2008 23,984 105,625 55,767 920 14,683 415 134 34 - - - -
2009 122,343 147,894 43,008 618 1,156 215 541 2,449 - - - -
2010 63,635 94,342 6,060 7,811 2,205 26 2,598 - - 1,745 - -
2011 49,400 123,508 87,293 14,132 5,172 - - - - - - -
2012 67,552 94,515 15,997 3,059 2,252 - - 386 - - - -
2013 81,126 214,891 27,575 3,846 1,435 - 18 - - - - -
2014 159,261 88,309 52,630 7,180 146 3 - - - - - -
2015 96,803 77,660 3,513 5,746 397 - - - - - - -
2016 73,103 51,051 12,585 4,625 - - - - - - - -
2017 69,102 46,047 3,364 - - - - - - - - -
2018 60,408 47,642 - - - - - - - - - -
2019 50,983 - - - - - - - - - - -

ENGINEERING Combined results table (Attritional and Large Losses)

Accident Latest Paid Gross claims Gross Earned Ultimate
Year Paid to date Large Loss Total Ultimate reserve Premium Loss ratio
2007 140,117 - 140,117 - 593,884 24%
2008 201,562 21,817 223,379 - 593,884 38%
2009 318,223 32,923 351,147 - 593,884 59%
2010 178,421 112,382 290,803 - 550,249 53%
2011 279,504 136,665 416,169 - 550,249 76%
2012 183,762 77,692 261,454 - 716,219 37%
2013 328,891 102,083 430,974 - 687,315 63%
2014 307,529 312,333 628,680 8,818 980,992 64%
2015 184,119 74,748 269,593 10,726 817,303 33%
2016 141,363 61,570 213,078 10,145 799,904 27%
2017 118,513 95,024 288,391 74,854 1,236,223 23%
2018 108,050 79,576 316,182 128,556 1,333,565 24%
2019 50,983 776 319,533 267,774 1,181,265 27%
Total 2,541,037 1,107,590 4,149,500 500,873 10,634,936
ANNUAL REPORT
& ACCOUNTS 2019 143
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

FIRE Table of claims paid excluding large claims (Attritional Table)

Accident
Year 1 2 3 4 5 6 7 8 9 10 11
2007 - 107,972 92,652 3,492 3,087 1,947 549 - - 463 -
2008 374,759 302,531 107,940 19,373 1,583 310 288 20 20 - -
2009 138,680 163,929 36,520 7,903 619 - 54 4,180 - - 133
2010 175,303 127,912 34,528 46,782 10,745 43 1,483 - - - -
2011 237,670 439,609 112,765 1,627 339 4,064 5,426 - 13 - -
2012 141,267 278,907 18,893 6,504 4,875 23 - 776 - - -
2013 304,906 174,174 21,852 37,622 225 - 62 - - - -
2014 356,023 225,666 64,750 15,966 627 611 - - - - -
2015 277,168 261,308 12,866 1,637 1,755 - - - - - -
2016 309,003 287,652 31,614 8,129 - - - - - - -
2017 295,526 244,555 45,102 - - - - - - - -
2018 277,942 436,740 - - - - - - - - -
2019 439,690 - - - - - - - - - -

FIRE Table of inflated adjusted claims paid excluding large claims (Attritional Table)
Accident
Year 1 2 3 4 5 6 7 8 9 10 11
2007 - 368,855 277,893 9,369 7,509 4,228 1,104 - - 661 -
2008 1,280,257 907,384 289,577 47,120 3,438 624 535 34 29 - -
2009 415,946 439,781 88,824 17,163 1,244 - 91 5,977 - - 133
2010 470,293 311,111 74,982 94,068 19,949 73 2,121 - - - -
2011 578,067 954,668 226,745 3,022 574 5,811 6,724 - 13 - -
2012 306,780 560,819 35,078 11,018 6,971 28 - 776 - - -
2013 613,096 323,384 37,018 53,793 278 - 62 - - - -
2014 661,016 382,288 92,581 19,787 699 611 - - - - -
2015 469,533 373,621 15,945 1,823 1,755 - - - - - -
2016 441,816 356,494 35,208 8,129 - - - - - - -
2017 366,253 272,361 45,102 - - - - - - - -
2018 309,544 436,740 - - - - - - - - -
2019 439,690 - - - - - - - - - -

FIRE Combined results table (Attritional and Large Losses)

Accident Latest Paid Gross claims Gross Earned Ultimate
Year Paid to date Large Loss Total Ultimate reserve Premium Loss ratio
2007 669,618 202,602 872,220 - 1,203,372 72%
2008 2,528,998 1,840,810 4,369,808 - 1,203,372 363%
2009 969,025 89,484 1,058,509 - 1,203,372 88%
2010 972,597 127,207 1,099,804 - 1,644,687 67%
2011 1,775,626 560,752 2,336,378 - 1,878,292 124%
2012 921,470 396,060 1,317,530 - 1,967,539 67%
2013 1,027,631 455,342 1,483,079 106 2,029,174 73%
2014 1,156,982 842,325 2,047,730 48,423 2,021,096 101%
2015 862,678 450,093 1,392,419 79,648 1,990,048 70%
2016 841,647 2,548,554 3,460,726 70,525 2,326,034 149%
2017 683,717 1,375,601 2,163,623 104,305 2,575,040 84%
2018 746,284 1,204,557 2,257,458 306,617 3,038,005 74%
2019 436,690 229,292 2,297,241 1,631,259 3,275,502 70%
Total 13,592,963 10,322,680 26,156,526 2,240,883 26,355,533
144 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

MARINE Table of claims paid excluding large claims (Attritional Table)

Accident
Year 1 2 3 4 5 6 7 8 9 10 11
2007 - 19,792 21,180 2,889 2,010 - - - - - -
2008 183,671 72,873 23,692 3,905 6,569 30 3,865 - - - -
2009 90,957 107,709 28,685 4,329 929 58 54 - - - -
2010 69,958 71,656 10,320 234 2,848 - - - - - -
2011 89,427 83,735 9,788 3,004 147 37 - - - - -
2012 143,326 114,430 6,403 450 366 32 - - - - -
2013 122,320 121,486 15,176 - 1,582 - - - - - -
2014 165,869 107,548 36,603 8,041 5,348 81 - - - - -
2015 162,103 145,063 20,702 12,907 - - - - - - -
2016 120,585 92,416 13,486 6,071 - - - - - - -
2017 128,799 131,511 4,272 - - - - - - - -
2018 247,241 131,126 - - - - - - - - -
2019 256,061 - - - - - - - - - -

MARINE Table of inflated adjusted claims paid excluding large claims (Attritional Table)
Accident
Year 1 2 3 4 5 6 7 8 9 10 11
2007 - 67,613 63,527 7,750 4,890 - - - - - -
2008 627,459 218,568 - 9,498 14,265 60 7,176 - - - -
2009 272,808 288,957 69,769 9,401 1,868 107 92 - - - -
2010 187,679 174,283 22,411 472 5,288 - - - - - -
2011 217,506 181,842 19,681 5,577 250 53 - - - - -
2012 311,251 230,093 11,888 762 523 39 - - - - -
2013 245,957 225,559 25,708 - 1,961 - - - - - -
2014 307,964 182,191 52,335 9,965 5,957 81 - - - - -
2015 274,609 207,413 25,657 14,375 - - - - - - -
2016 172,414 114,533 15,019 6,071 - - - - - - -
2017 159,624 146,464 4,272 - - - - - - - -
2018 275,353 131,126 - - - - - - - - -
2019 256,061 - - - - - - - - - -

MARINE Combined results table (Attritional and Large Losses)

Accident Latest Paid Gross claims Gross Earned Ultimate
Year Paid to date Large Loss Total Ultimate reserve Premium Loss ratio
2007 143,780 - 143,780 - 862,220 17%
2008 877,027 21,131 898,158 - 862,220 104%
2009 643,003 72,727 715,729 - 862,220 83%
2010 390,132 - 390,132 - 1,005,603 39%
2011 424,909 16,644 441,553 - 1,026,446 43%
2012 554,556 271,138 825,694 - 1,083,007 76%
2013 499,185 270,989 770,174 - 1,000,601 77%
2014 558,492 315,613 906,716 32,611 1,262,545 72%
2015 522,054 572,856 1,202,497 107,588 1,136,917 106%
2016 308,038 101,676 486,344 76,630 621,818 78%
2017 310,360 143,562 533,878 79,956 1,247,786 43%
2018 406,479 600,601 1,306,824 299,745 1,511,154 86%
2019 256,061 128,437 1,057,625 673,127 1,931,262 55%
5,894,076 2,515,372 9,679,104 1,269,657 14,413,799
ANNUAL REPORT
& ACCOUNTS 2019 145
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

GENERAL ACCIDENT Table of claims paid excluding large claims (Attritional Table)
Accident
Year 1 2 3 4 5 6 7 8 9 10 11 12
2007 - 150,727 45,046 25,010 21,267 5,632 5,118 1,769 - 150 - -
2008 78,583 115,978 58,285 88,778 4,000 8,545 3,285 1,573 - - - -
2009 62,974 98,556 47,384 33,570 6,790 2,424 3,005 118 - - - -
2010 80,873 80,915 40,296 23,772 20,746 5,813 1,999 284 107 1,957 - -
2011 99,785 129,214 58,716 18,214 8,526 2,777 3 582 403 - - -
2012 116,947 115,763 38,016 11,916 14,145 17 - - - - - -
2013 67,883 72,208 26,216 9,508 4,581 - 8 - - - - -
2014 52,707 113,680 46,197 14,664 1,592 38 - - - - - -
2015 79,920 92,493 28,800 20,117 5,218 - - - - - - -
2016 117,173 123,799 22,693 6,013 - - - - - - - -
2017 64,491 111,364 31,511 - - - - - - - - -
2018 86,842 66,601 - - - - - - - - - -
2019 77,114 - - - - - - - - - - -

GENERAL ACCIDENT Table of inflated adjusted claims paid excluding large claims (Attritional Table)
Accident
Year 1 2 3 4 5 6 7 8 9 10 11 12
2007 - 514,915 135,106 67,095 51,727 12,231 10,291 3,284 - 214 - -
2008 268,457 347,855 156,365 215,929 - 17,182 6,100 2,665 - - - -
2009 188,880 264,399 115,249 72,902 13,652 4,501 5,090 169 - - - -
2010 216,961 196,803 87,507 47,800 38,519 9,847 2,859 353 119 1,957 - -
2011 242,699 280,605 118,065 33,818 14,443 3,971 3 649 403 - - -
2012 253,965 232,772 70,583 20,186 20,225 21 - - - - - -
2013 136,496 134,066 44,411 13,595 5,678 - 8 - - - - -
2014 97,860 192,578 66,053 18,174 1,773 38 - - - - - -
2015 135,388 132,247 35,693 22,404 5,218 - - - - - - -
2016 167,535 153,428 25,273 6,013 - - - - - - - -
2017 79,925 124,026 31,511 - - - - - - - - -
2018 96,716 66,601 - - - - - - - - - -
2019 77,114 - - - - - - - - - - -

GENERAL ACCIDENT Combined results table (Attritional and Large Losses)

Accident Latest Paid Gross claims Gross Earned Ultimate
Year Paid to date Large Loss Total Ultimate reserve Premium Loss ratio
2007 794,863 62,258 857,121 - 2,322,854 37%
2008 1,014,553 231,033 1,245,587 - 2,322,854 54%
2009 664,976 175,847 840,823 - 2,322,854 36%
2010 602,725 375,106 977,831 - 1,824,950 54%
2011 694,655 201,389 896,045 - 2,021,176 44%
2012 597,752 218,812 816,652 87 1,367,701 60%
2013 334,254 138,183 472,683 246 1,196,502 40%
2014 376,476 103,923 571,580 91,182 1,143,149 50%
2015 330,950 356,710 796,785 109,124 1,183,481 67%
2016 352,249 14,773 452,618 85,596 1,175,191 39%
2017 235,462 89,506 450,666 125,698 1,131,193 40%
2018 163,318 33,825 340,704 143,562 1,504,350
2019 77,114 37,319 616,066 501,633 1,654,787 37%
Tota
Total 6,239,347 2,038,684 9,335,161 1,057,128 21,171,042
146 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

BOND Table of claims paid excluding large claims (Attritional Table)

Accident
Year 1 2 3 4 5 6 7 8 9 10 11 12
2007 - 563 548 215 - - - - - - - -
2008 75,938 81,831 - - 125 - - - - - - -
2009 21,339 154,217 5,827 - - - - - - - - -
2010 2,687 209,669 1,657 - - - - - - - - -
2011 283,845 281,558 665 - - - 180 50 - - - -
2012 488,898 605,149 - - - - 79 80 - - - -
2013 307,415 50,813 - - - 290 - - - - - -
2014 179,905 212,813 315 14,049 - - - - - - - -
2015 93,525 110,020 738 - 2,000 - - - - - - -
2016 477,003 132,182 31,076 281,560 - - - - - - - -
2017 26,612 792,470 22,434 - - - - - - - - -
2018 60,007 315,954 - - - - - - - - - -
2019 19,476 - - - - - - - - - - -

BOND Table of inflated adjusted claims paid excluding large claims (Attritional Table)
Accident
Year 1 2 3 4 5 6 7 8 9 10 11 12
2007 - 1,923 1,642 577 - - - - - - - -
2008 259,419 245,438 - - 271 - - - - - - -
2009 64,001 413,725 14,174 - - - - - - - - -
2010 7,209 509,963 3,599 - - - - - - - - -
2011 690,376 611,439 1,337 - - - 223 56 - - - -
2012 1,061,705 1,216,815 - - - - 87 80 - - - -
2013 618,141 94,342 - - - 323 - - - - - -
2014 334,023 360,514 450 17,411 - - - - - - - -
2015 158,434 157,308 914 - 2,000 - - - - - - -
2016 682,024 163,817 34,609 281,560 - - - - - - - -
2017 32,981 882,574 22,434 - - - - - - - - -
2018 66,829 315,954 - - - - - - - - - -
2019 19,476 - - - - - - - - - - -

BOND Combined results table (Attritional and Large Losses)

Accident Latest Paid Gross claims Gross Earned Ultimate
Year Paid to date Large Loss Total Ultimate reserve Premium Loss ratio
2007 4,142 - 4,142 - 272,411 2%
2008 505,128 - 505,128 - 272,411 185%
2009 491,900 - 515,755 23,855 272,411 189%
2010 520,771 - 520,771 - 427,458 122%
2011 1,303,431 - 1,372,551 69,120 599,336 229%
2012 2,278,687 - 2,278,687 - 761,353 299%
2013 712,806 - 712,806 - 593,545 120%
2014 712,398 - 715,909 3,511 761,845 94%
2015 318,656 - 318,689 33 728,863 44%
2016 1,162,010 - 1,239,392 77,383 740,170 167%
2017 937,989 - 981,346 43,357 594,131 165%
2018 382,784 430,250 47,466 696,329 62%
2019 19,476 - 397,414 377,938 883,810 45%
Total 9,350,178 - 9,992,840 642,663 7,604,074
ANNUAL REPORT
& ACCOUNTS 2019 147
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

SPECIAL RISK Table of claims paid excluding large claims (Attritional Table)
Accident
Year 1 2 3 4 5 6 7 8 9 10 11 12
2007 4,534 9,535 - 11,877 - - - - - - - -
2008 19,199 3,025 1,379 - - 8,865 - - 280 2,982 1,327 -
2009 3,884 - 2,624 - 22,215 677 6,908 - 662 1,581 - -
2010 23,568 53,773 196,010 9,282 25,490 - - - 401 - - -
2011 68,684 165,111 65,533 85,041 3,324 - 2,238 900 - - - -
2012 82,728 7,382 277,016 146,549 169,718 669 67,147 - - - - -
2013 4,118 372,917 78,512 1,881 1,624 26,143 292 - - - - -
2014 72,022 294,280 - 4,626 2,569 8,365 - - - - - -
2015 12,651 26,561 6,535 143,008 5,941 - - - - - - -
2016 48,595 17,398 422,680 309,896 - - - - - - - -
2017 64,380 77,926 350,175 - - - - - - - - -
2018 219,267 356,636 - - - - - - - - - -
2019 67,272 - - - - - - - - - - -

SPECIAL RISK Table of inflated adjusted claims paid excluding large claims (Attritional Table)
Accident
Year 1 2 3 4 5 6 7 8 9 10 11 12
2007 17,830 32,572 - 31,862 - - - - - - - -
2008 65,589 9,072 3,700 - - 17,825 - - 401 3,696 1,478 -
2009 11,650 - 6,383 - 44,669 1,258 11,702 - 821 1,760 - -
2010 63,227 130,787 425,661 18,664 47,326 - - - 447 - - -
2011 167,055 358,561 131,771 157,894 5,631 - 2,774 1,002 - - - -
2012 179,654 14,843 514,326 248,259 242,664 829 74,782 - - - - -
2013 8,280 692,383 133,002 2,689 2,013 29,116 292 - - - - -
2014 133,722 498,521 - 5,733 2,861 8,365 - - - - - -
2015 21,431 37,977 8,099 159,268 5,941 - - - - - - -
2016 69,482 21,562 470,738 309,896 - - - - - - - -
2017 79,788 86,787 350,175 - - - - - - - - -
2018 244,197 356,636 - - - - - - - - - -
2019 67,272 - - - - - - - - - - -

SPECIAL RISK Combined results table (Attritional and Large Losses)

Accident Latest Paid Gross claims Gross Earned Ultimate
Year Paid to date Large Loss IBNER Total Ultimate reserve Premium Loss ratio
2007 82,264 - - 82,264 - 7,504,563 1%
2008 101,762 - 36,000 282,021 180,259 11,687,862 2%
2009 78,242 207,736 216,000 522,469 236,490 11,515,695 5%
2010 686,111 342,307 108,000 1,145,908 117,490 6,616,535 17%
2011 824,687 583,844 396,000 2,396,131 987,599 6,290,318 38%
2012 1,275,359 2,499,428 468,000 5,732,865 1,958,078 12,863,770 45%
2013 867,774 - 936,000 3,628,241 2,760,466 10,615,790 34%
2014 649,202 - 792,000 2,884,436 2,235,234 11,748,608 25%
2015 232,717 367,277 - 2,917,995 2,318,001 10,975,832 27%
2016 871,678 3,486,963 - 5,575,140 1,216,499 12,006,726 46%
2017 516,749 14,381,594 - 34,552,113 19,653,770 14,528,257 238%
2018 600,833 1,014,824 - 8,829,278 7,213,621 18,364,393 48%
2019 67,272 851,049 - 12,687,820 11,769,498 21,031,263 60%
Total 6,854,650 23,735,023 2,952,000 81,236,681 50,647,005 155,749,614
148 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

23 Investment contract liabilities

Movement in investment contract liabilities is as shown below

Company Company
31-Dec-19 31-Dec-18

Balance, beginning of year 21,890,989 22,532,309

Reclassification from Insurance contract liabilities - -
Deposits received 9,856,703 7,954,712
Withdrawals (6,747,694) (10,808,192)
Guaranteed interest charged during the year 1,796,214 2,212,161

Balance, end of year 26,796,212 21,890,990

Current 3,287,701 3,287,701

Non Current 23,508,511 18,603,289

26,796,212 21,890,990

24 Capital and reserves

a Share capital

Company Company
31-Dec-19 31-Dec-18

(i) Authorised:
Ordinary shares of 50k each:
20,000,000,000 units
(2018: 10,000,000,000 units) 10,000,000 10,000,000

(ii) Issued and fully paid;

The issued and fully paid up capital of the company which is a composite insurer is
N10bn (2018: N10bn). In line with regulations issued by the National Insurance
Commission (NAICOM), issued and paid capital of the company is allocated as follows;

Company Company
31-Dec-19 31-Dec-18
Ordinary shares of 50k each:
General Insurance business 10,000,000,000 units (2018:
10,000,000,000) 5,000,000 5,000,000

Life business 10,000,000,000 units (2018: 10,000,000) 5,000,000 5,000,000

10,000,000 10,000,000
b Share premium
Share premium comprises the amount paid over the nominal value of shares. This
reserve is not ordinarily available for distribution.

c Retained earnings
The retained earnings is the carried forward recognised income net of expenses plus
current profit attributable to shareholders. It is the amount available for dividend
distribution to the equity shareholders of the company. See statement of changes in
equities for movement in retained earnings.

d Other Reserves
Components of other reserves are as follows: Company Company
31-Dec-19 31-Dec-18

Contingency reserve (see note (i) below) 13,648,609 11,732,730

Asset revaluation reserves (see note (ii) below) 1,558,700 1,497,291
Fair value reserves (see note (iii) below 4,198,892 3,090,660
Translation reserve (see note (iv) below) - -
19,406,201 16,320,681
ANNUAL REPORT
& ACCOUNTS 2019 149
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

(i) Contingency reserves

Included in the contigency reserve is contigency reserve from Leadway Assurance Company general insurance and
life business in line with Insurance act of 2003.
In compliance with Section 21 (1) of Insurance Act 2003, the contingency reserve for general insurance business is
credited with the greater of 3% of total premiums or 20% of the net profits (whichever is greater).This shall
accumulate until it reaches the amount of greater of minimum paid-up capital or 50 percent of net premium. While
for life business, the contingency reserves is credited with an amount equal to 1% of gross premium or 10% of net
profit (whichever is greater) and accumulated until it reaches the amount of minimum paid up capital.

Leadway Vie maintains a Legal reserve in accordance with the provisions of Article 346 of the OHADA Treaty on
Commercial Companies and Economic Interest Groupings, a company is expected to set aside 10% of its profit after
tax, after payment of dividends minus carried forward losses as legal reserve. This ceases to be mandatory when the
amount so set aside reaches 20% of its stated capital.

(ii) Asset revaluation reserve

This reserve is the accumulation of revaluation gain on the company's land and buildings. See statement of
changes
in equities for movement in asset revaluation reserve.

(iii) Fair value reserve

Fair value reserve includes the net accumulated change in the fair value of available for sale asset until the
investment is derecognized or impaired. See statement of changes in equities for movement in fair value reserve.

(iv) Translation reserve

The translation reserve comprises foreign exchange differences on the translation to Naira of the results and
financial position of the foreign subsidiary within the Company. See statement of changes in equity for
movement in
translation reserve.

25 Non controlling interest

Non controlling interest comprises:
Company Company
31-Dec-19 31-Dec-18

Leadway Vie - -

Analysis of movement in controlling interest

(a) See statement of changes in equities for movement in non controlling interest during the period

(b) The financial information for the subsidiary (2019: subsidiaries) with non-controlling interest are disclosed in
note 15 (investment in subsidiaries) of these financial statements.

26 Gross premium written

Company Company
31-Dec-19 31-Dec-18
Gross premium
- General Insurance business 35,046,532 30,238,299
- Life business 55,549,660 57,281,421
90,596,192 87,519,720
Decrease /(Increase)

- Unearned premium (see note (a) I below) (1,741,886) 217,510

Gross premium income 88,854,306 87,737,230

150 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

a) The movement in unearned premium is analysed as follows:

(i) General Insurance business

Company Company
31-Dec-19 31-Dec-18
Motor (201,391) 37,332
Fire (169,810) 213,710
General Accident (140,834) (135,912)
Agric 210,533 -
Bond 32,807 (138,871)
Marine (23,978) 6,850
Engineering 145,410 (3,144)
Special risk (939,232) 506,077
Total for General Business (1,086,495) 486,042

Group life (655,391) (268,532)

(1,741,886) 217,510

(ii) Life business - Annuity & Ind. Life Company Company

31-Dec-19 31-Dec-18
Individual life (993,480) (120,183)
Annuity (73,125,802) (30,020,421)
(74,119,282) (30,140,604)

27 Reinsurance expenses Company Company

31-Dec-19 31-Dec-18
Reinsurance premium paid 18,022,240 16,018,811
Increase in unexpired reinsurance cost (66,041) 596,544
17,956,199 16,615,355

28 Commission income Company Company

31-Dec-19 31-Dec-18
Commission earned on general insurance contracts 2,769,245 1,727,104
Commission earned on Company life assurance contracts 118,934 152,567
2,888,179 1,879,671

29 Analysis of Net Claims Expense

Company Company
Combined 31-Dec-19 31-Dec-18

Gross benefits & claims paid (see note 22.1c) 13,883,348 26,067,499
Annuity Claims 27,435,750 21,025,441
Claims ceded to reinsurers (3,319,096) (15,555,597)
Change in provision for outstanding claims & IBNR (4,594,192) 11,531,516
Proceed from salvage and subrogation (71,170) (89,495)
Change in reinsurance recoverable on outstanding 5,139,861 (9,087,671)
claims & IBNR
38,474,501 33,891,693

Company Company
General Insurance business 31-Dec-19 31-Dec-18

Gross benefits & claims paid 9,552,855 21,819,387

Claims ceded to reinsurers (3,088,747) (15,105,954)
Change in provision for outstanding claims (4,617,927) 10,838,510
Recoveries from salvage and subrogation (71,170) (89,495)
Change in recoverable on outstanding claims 4,573,557 (9,067,716)

(a) 6,348,568 8,394,732

Company Company
Life business 31-Dec-19 31-Dec-18
Gross benefits & claims paid 4,330,493 4,248,112
Annuity Claims 27,435,750 21,025,441
Claims ceded to reinsurers (230,349) (449,642)
Change in provision for outstanding claims 23,735 693,006
Change in recoverable on outstanding claims 566,304 (19,956)

(b) 32,125,933 25,496,961

(a+b) 38,474,501 33,891,693

ANNUAL REPORT
& ACCOUNTS 2019 151
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

30 Underwriting expenses
Underwriting expenses can be sub-divided into acquisition and other maintenance expenses. Acquisition expenses
relate to commission expenses incurred in obtaining and renewing insurance contracts. They include commissions or
brokerage paid to agents or brokers. Maintenance expenses are those incurred in processing costs and other
incidental costs.
Company Company
31-Dec-19 31-Dec-18

Acquisition expenses 5,786,757 5,554,578

Maintenance expenses 2,341,947 604,916

8,128,704 6,159,494

Company Company
31 Investment income 31-Dec-19 31-Dec-18

Interest income on debt securities 25,737,607 19,659,077

Rental income 754,360 928,082
Interest on loans 162,304 154,337
Interest on Finance Lease - -
Interest on short term deposits 985,868 1,188,768
Dividend income on investment securities 1,307,103 921,056
Profit/(Loss)on sale of investment securities 2,864,382 (118,982)
Interest income on statutory deposits 41,831 57,217
(Loss)/ Profit on Sale of Investment Property - 15,894

31,853,455 22,805,449

Company Company
31-Dec-19 31-Dec-18

a. Profit/(Loss) from investment contracts 602,697 239,712

The above figure relates to profit or (loss) for the

year, see DA revenue in appendix

32 Net fair value gain/ (loss) on assets at fair value

Company Company
31-Dec-19 31-Dec-18
Financial assets at fair value through profit or loss
- Fair value gains/(losses) on listed equity securities (1,425,147) (118,245)
- Fair value gains/(losses) on listed debt securities 35,075,322 (12,102,386)
- Fair value gains/(losses) on investment property 207,877 410,960

33,858,052 (11,809,671)

33 Other operating income Company Company

31-Dec-19 31-Dec-18

Fee income on shared locations & services 14,180 6,940

Profit/ (Loss) on sale of property and equipment 3,424 (28,954)

Foreign exchange gain/(loss)
- Investment securities (6,158) 441,173
- Cash and cash equivalents (40,352) 2,582,122
- Loans and advances - -
- others - 170,532
Other income 734,510 1,091,091

705,604 4,262,904

Other income represents income on current account, surrender fees, policy fees, and other miscellaneous income that
does not fall under income head above

34 Employee benefit expense Company Company

31-Dec-19 31-Dec-18

Wages and salaries - staff and executive directors 2,541,990 2,334,892

Pension cost - Defined contribution plan 35,068 1,061,090
Termination benefits (see note (d) below) - -
Profit sharing expense 619,080 449,166

3,196,138 3,845,148

(a) Staff information:

Employees earning more than N100,000 per annum, other than the executive directors, whose duties were wholly or
mainly discharged in Nigeria, received emoluments in the following ranges:
152 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Company Company
31-Dec-19 31-Dec-18
Number Number
Absolute
N101,001 - N500,000 - -
N500,001 - N750,000 - -
N750,000 - N1,000,000 - -
N1,000,000 - N2,000,000 3 11
N2,000,000 - N3,000,000 22 2
Over N3,000,000 285 271
310 284

(b) The average number of full time persons employed during the year was as follows:

Company Company
31-Dec-19 31-Dec-18
Number Number

Executive directors 3 3
Management staff 28 26
Non-management staff 282 258
313 287

(c ) Directors' remuneration

(i) Remuneration paid to the directors is as follows:

Company Company
31-Dec-19 31-Dec-18

Salaries and wages 119,597 117,847

Directors' fees 68,216 115,388
Post-employment benefits 5,130 984,701

192,943 1,217,936

(ii) The directors' remuneration shown above includes

Company Company
31-Dec-19 31-Dec-18

Chairman 25,807 25,807

Highest paid director 53,281 53,011

(iii) The emoluments of all other directors fell within the following range:

Company Company
31-Dec-19 31-Dec-18
Number Number
Above N4,800,000 8 8
N2,300,000 - N4,800,000 - -
N1,500,000 - N2,300,000 - -
N750,000 - N1,500,000 - -
Below N750,000 - -
8 8

(d) Termination benefit relates to payments made to disengaged staff during the relevant period.

35 Other operating expenses Company Company

31-Dec-19 31-Dec-18

Contract staff cost 167,160 216,566

Asset repairs and maintenance 487,518 427,625
Corporate expenses and gift items 318,492 206,692
Telecommunication 698,084 688,134
Advertisement 905,834 875,327
Agency related expenses 72,743 95,581
Property insurance expense 42,366 62,950
Insurance supervisory fund 702,905 954,160
Professional fees 223,212 525,489
Travelling, tours and other passage exps. 202,532 224,205
Auditor's remuneration 79,473 45,000
Bank charges 90,260 88,067
Offices rates and rent 28,337 109,946
Training cost 123,104 80,216
Power and Fuel charges 166,612 199,180
Donations 42,777 50,891
Subscription 23,607 29,686
Depreciation of property and equipment 457,721 397,832
Amortisation of intangible assets 153,599 161,809
Directors' fees and allowances 68,216 115,388
Hotel management expenses 13,623 11,972
Entertainment 39,937 17,631
Investment expenses 219,072 63,436
Others 268,370 357,021
5,595,554 6,004,804
ANNUAL REPORT
& ACCOUNTS 2019 153
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

36 Net impairment losses Company Company

31-Dec-19 31-Dec-18
Impairment on trade receivable no longer required (see note 7c) - -
Impairment loss on other receivables (see note 11b) - -
Write - off of AFS Financial assets - -
Impairment on Premium deposit - -
Impairment loss on reinsurance assets - -
Impairment loss AFS Financial asset(note 8.2aiib) - -
Specific impairment loss on finance leases receivable - -
Impairment loss on HTM Bond Investment - -
Collective impairment loss on finance leases receivable - -
Specific Impairment write back on loans (see note 12i) 9,127 (50,652)
Collective impairment write back on loans (see note 12i) (3,677) 27,871
5,450 (22,781)

37 Income tax expense Company Company

31-Dec-19 31-Dec-18
Current tax on profits for the year:
Company income tax 321,321 535,933
Education tax - -
Technology levy 112,865 102,541
Nigeria Police fund levy 564 -
Withholding tax on dividend income - 114,683

Total current tax 434,750 753,157

Deferred tax charge credit - 1,476,304
434,750 2,229,461

(b) The tax on the company's profit before tax differs from the theoretical amount that would arise using the
weighted average tax rate applicable to profits of the consolidated entities as follows:

Company Company
31-Dec-19 31-Dec-18

Profit before income tax 11,286,465 11,463,674

Tax calculated at domestic rate applicable in Nigeria
at 30% (2018: 30%) 3,385,939 3,439,102
Effect of:
Tax exempt income (10,481,108) (7,357,966)
Non-deductible expenses 8,261,056 6,940,001
Technology levy 112,865 114,637
Tax assessment based on minimum tax (321,322) (450,000)
WHT paid on dividend (43,936) (62,406)
Capital allowance (478,745) (393,907)

Total income tax expense in comprehensive income 434,750 2,229,461

154 ANNUAL REPORT
& ACCOUNTS 2019

Notes to the Company

Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

Reconciliation of effective tax rate Company Company

31-Dec-19 31-Dec-18
Tax calculated at domestic rate applicable in Nigeria
at 30% (2017: 30%) 30.00% 30.00%
Effect of:
Tax exempt income -92.86% -64.19%
Non-deductible expenses 73.19% 60.54%
Education tax 0.00% 0.00%
Technology levy 1.00% 1.00%
Capital gains tax 0.00% 0.00%
Tax assessment based on minimum tax -2.85% -3.93%
WHT paid on dividend -0.39% -0.54%
Capital allowance -4.24% -3.44%

Effective tax rate 3.85% 19.45%

Uncertainty over Income tax treatments

The Company's general business keeps a reserve for unexpired risk. Section 16(8)(a) of CITA allows general businesses
to take as a deduction, a 'reserve for unexpired risks'. This is the risk associated with future financial periods and includes
the 'unearned premium' received by the insurer applicable to those periods. Therefore there is uncertainty around
whether the deduction as permitted by the tax law is actually a "tax exemption or a 'deduction’ for that year. The
Company has treated the reserve for unexpired risks as a tax exemption as the Company believes that the reserve for
unexpired risks would will be allowed as an exemption.

The Company believes that its treatment of the reserve for unexpired risk for its general business is adequate based on
its assessment of factors including interpretations of tax law and prior experience with the tax authorities.

38 Earnings Per Share Company Company

31-Dec-19 31-Dec-18

Profit from continuing operations attributable to

owners of the parent 10,851,715 9,183,321
Loss from discontinued operations attributable to
owners of the parent - -

Total 10,851,715 9,183,321

Weighted average number of ordinary shares in

issue before deducting bonus shares 10,000,000 9,212,561
Bonus issued as of 31 May 2018 - 6,292,673

Weighted average number of shares in issue 10,000,000 15,505,234

Basic and diluted Earnings per share (kobo)

From continuing operations 59
From discontinued operations 109 -
-
Total comprehensive income for the year 109 59

39 Dividend
The dividend declared and paid in 2019 was a cash dividend of N3bn (15 kobo per share). The Board of Directors had
recommended the payment of N4bn (20 kobo per share). However, the shareholders resolved to reduce the dividend
recommended for payment from N4bn to N3bn.

A cash dividend of N3.5bn will be proposed at the next annual general meeting in respect of the year ended 31 Dec
2019. This has been disclosed in the financial statement.
ANNUAL REPORT
& ACCOUNTS 2019 155
Notes to the Company
Financial Statements Continued
(All amounts in thousands of Nigerian Naira)

40 Related parties
Leadway Assurance Company Limited is the ultimate parent/controlling party of the company. Related parties to the
Company are as follows:

(I) Subsidiary
The Company has one subsidiary as at 31 December 2019. Transactions between Leadway Assurance Company
Limited and the subsidiary also meet the definition of related party transactions. During the year, N641,462,095
representing the consideration for a bond was transferred to the subsidiary as deposit for shares. In addition,
N83,597,962 was advanced as loan to the subsidiary

(ii) Key management personnel

The key management personnel have been identified as the members of the board of directors (executive and non
executive members), including their close members of family and any other entity over which they exercise control.
Close members of family are those family members who may be expected to influence, or be influenced by that individual
in their dealings with Leadway Assurance Company Limited. The compensation paid or payable to key management
personnel for employee services is disclosed in note 34c

Company Company
31-Dec-19 31-Dec-18

Salaries and other short term employee benefits 119,597 94,925

Pension cost - defined contribution 5,056 4,264
124,653 99,189

Key management personnel and their immediate relatives engaged in the following transactions with the company
during the year.
Company Company
31-Dec-19 31-Dec-18
Loans and advances to key
management 64,821 84,386
Interest income earned by the company
during the year 3,049 3,791

41 Contingent liabilities, litigations and claims

The company in the ordinary course of business is currently involved in 55 cases (2018: 48) legal cases. The actions
are vigorously contested and the Directors are of the opinion that no significant liability will arise therefrom in excess
of the provision that has been made in the financial statements.

In 2018, The National Insurance Commission (NAICOM) fined the Company the sum of N2,674,029,543
($7,458,730.70) for alleged failure to remit co-insurance premium within 30 days as required by the Market Conduct
Guidelines for Insurance Institutions 2015 (the Market Guidelines).
Following the Company's objection to and appeal against the imposition of the fine, NAICOM has rescinded the demand
for payment, pending their consideration of the Company's objection and appeal. The Company is optimistic of a
favorable outcome of its objection and appeal. Accordingly, no provision has been recognized in respect of the fine as at
December 2019.

42 Contravention of laws and regulations

The Company in 2019 paid fines totaling N37,500. See table below for descriptions of the fines and amount paid

Nos Description of fines Amount

N
i Late response to Naicom's enquiry on a client's policy 37,500

43 Events after the reporting date

The World Health Organization declared the coronavirus (COVID – 19) outbreak a pandemic and most governments
have taken restrictive measures to contain its further spread by introducing lockdowns, closures of borders and travel
restrictions which has affected the free movement of people and goods. The Nigerian Centre for Disease Control
(NCDC) has confirmed COVID -19 cases in Nigeria and this has resulted in lock down in certain states. The pandemic
has caused a significant reduction in social interactions, disruption in economic activities while some public facilities
have been shut down in a bid to reduce the spread of the virus.

The Company considers this outbreak to be a non-adjusting subsequent event. As the situation is fluid and rapidly
evolving, the Directors do not consider it practicable to provide a quantitative estimate of the potential impact of this
outbreak and will continue to evaluate the impact of COVID-19 on the Company’s operations, financial position and
operating results.

As at the date these financial statements were authorized for issue, the Directors were not aware of any material
adverse effects on the financial statements as a result of the COVID-19 outbreak. There were no other events after the
reporting date that could have had a material effect on the financial statements of the Company that have not been
provided for or disclosed in these financial statements.
156 ANNUAL REPORT
& ACCOUNTS 2019

APPENDICES TO
FINANCIAL STATEMENTS
(OTHER NATIONAL DISCLOSURES)
ANNUAL REPORT
& ACCOUNTS 2019 157
Value Added Statement
(All amounts in thousands of Nigerian Naira unless otherwise stated)

Company % Company %
2019 2018

Gross premium income (Local) 90,596,192 87,519,720

Investment income
- Local 31,853,455 22,805,449

Other income
- Local 705,604 4,262,904

Reinsurance, claims, commission & operating expenses

- Local (96,171,767) (87,397,949)
- Foreign (11,889,561) (11,372,553)

Value added 15,093,923 100 15,817,571 100

Applied to pay:

Employee benefit expense 3,196,138 20% 3,845,148 25%

Government as tax 434,750 3% 2,229,461 14%

Retained in the business

Depreciation of Property and equipment 457,721 3% 397,832 3%
Amortisation of intangible assets 153,599 2% 161,809 1%
To augment reserve 10,851,715 72% 9,183,321 58%

Value added 15,093,923 100% 15,817,571 100%

 158 ANNUAL REPORT
& ACCOUNTS 2019

Five Year Financial Summary

(All amounts in thousands of Nigerian Naira unless otherwise stated)

COMPANY

2019 2018 2017 2016 2015

Assets
Cash and cash equivalents 26,210,607 32,978,304 27,800,239 24,189,697 14,656,941
Trade receivables 102,459 395,585 231,987 169,761 543,971
Investment securities 300,626,105 209,289,720 179,922,719 111,041,245 91,511,039
Reinsurance assets 39,038,453 43,688,887 35,235,353 11,720,783 11,405,947
Deferred acquisition cost 825,367 851,069 548,797 486,416 423,123
Other receivables and prepayment 2,132,561 1,417,602 3,534,606 1,115,754 1,114,898
Loans and advances 1,402,795 1,395,564 1,065,407 797,368 1,217,079
Property and equipment 4,412,066 3,428,095 3,828,939 3,645,335 3,760,439
Investment properties 17,199,024 16,414,443 14,963,765 8,159,419 8,795,000
Investment in subsidiaries 2,153,425 2,153,425 3,637,495 3,637,495 3,294,467
Investment in associates - - - - -
Deferred tax assets - - 286,446 286,446 114,129
Intangible assets 162,448 255,339 392,884 313,804 31,308
Statutory deposits 500,000 500,000 500,000 500,000 50,000

Total assets 394,765,310 312,768,033 271,948,637 166,063,523 137,368,341

Liabilities
Trade payables 9,690,123 11,573,804 3,633,509 2,754,639 2,714,107
Current tax liabilities 859,502 1,083,948 1,119,536 900,143 651,998
Other liabilities 4,539,823 5,627,973 12,926,747 7,097,389 3,895,636
Insurance contract liabilities 296,704,133 225,437,157 183,982,546 104,757,646 93,785,535
Investment contract liabilities 26,796,212 21,890,990 22,532,309 18,294,287 15,459,507
Deferred tax liabilities 1,883,284 1,883,284 693,427 728,673 556,356

Total liabilities 340,473,077 267,497,156 224,888,074 134,532,777 117,063,139

Capital and reserves

Issued and paid share capital 10,000,000 10,000,000 4,682,450 4,682,450 4,389,798
Share premium 588,575 588,575 4,433,748 4,233,748 387,826
Contingency reserve 13,648,610 11,732,730 9,877,208 7,839,003 6,481,209
Retained earnings 24,297,458 18,361,620 20,795,497 11,537,043 7,232,879
Assets revaluation reserves 1,558,699 1,497,292 1,435,516 1,363,442 1,294,941
Fair value reserves 4,198,891 3,090,660 5,836,144 1,875,060 518,549
Other reserves - - - - -

Shareholders funds: 54,292,233 45,270,877 47,060,563 31,530,746 20,305,202

Total equity and liabilities 394,765,310 312,768,033 271,948,637 166,063,523 137,368,341

ANNUAL REPORT
& ACCOUNTS 2019 159
Five Year Financial Summary Continued
(All amounts in thousands of Nigerian Naira unless otherwise stated)

STATEMENT OF COMPREHENSIVE INCOME

COMPANY 2019 2018 2017 2016 2015

Gross premium written 90,596,192 87,519,720 84,189,079 46,648,918 39,008,139

Premium earned 70,898,107 71,121,875 69,823,794 39,947,165 29,901,721

Profit before taxation 11,286,465 11,412,782 13,448,965 6,484,941 3,394,793

Taxation (521,717) (2,229,461) (652,304) (105,012) (585,215)
Profit after taxation 10,764,748 9,183,321 12,796,661 6,379,929 2,809,578

Transfer to contingency reserve (1,915,879) (1,855,522) (2,038,206) (943,301) (758,747)

Basic/diluted earnings per share

(kobo)

From continuing operations (kobo) 108 59 83 72 73

From discontinued operations (kobo) - - - - -
160 ANNUAL REPORT
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General Insurance Business

Statement of Financial Position
As at 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

31-Dec-19 31-Dec-18
Assets
Cash and cash equivalents 21,308,948 26,860,343
Investment securities 40,925,920 30,277,807
Trade receivables 97,595 381,436
Reinsurance assets 38,674,736 42,636,372
Deferred acquisition cost 825,367 851,068
Loans and other receivables 721,484 1,255,786
Investment in subsidiaries - -
Investment properties 4,065,450 4,056,462
Deferred tax assets - -
Intangible assets 104,356 145,334
Property and equipment 2,493,152 2,505,062
Statutory deposits 300,000 300,000

Total assets 109,517,008 109,269,670

Liabilities
Insurance contract liabilities 66,644,120 70,175,551
Trade payables and other liabilities 11,016,115 11,684,791
Current tax liabilities 374,279 614,581
Deferred tax liabilities 773,269 773,264

Total liabilities 78,807,783 83,248,187

Capital and reserves

Share capital 5,000,000 5,000,000
Share premium - -
Contingency reserve 9,811,735 8,451,352
Retained earnings 10,966,196 8,318,251
Asset revaluation reserve 1,392,060 1,342,684
Fair value reserves 3,539,234 2,909,197

Shareholders funds: 30,709,225 26,021,484

Total equity and liabilities 109,517,008 109,269,670

ANNUAL REPORT
& ACCOUNTS 2019 161
General Insurance Business
Income Statement
For the year ended 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

31-Dec-19 31-Dec-18

Gross premium written 35,046,533 30,238,298

Add: reduction in unearned premium (1,086,495) 486,041
Gross insurance premium revenue 33,960,038 30,724,339

Reinsurance expense (17,393,664) (15,490,928)

Net insurance premium earned 16,566,374 15,233,411

Commission income 2,769,245 1,727,104

Total revenue 19,335,619 16,960,515

Claims expenses (6,348,569) (8,394,733)

Underwriting expenses (5,144,809) (3,305,257)
Net underwriting expenses (11,493,378) (11,699,990)

Total underwriting profit 7,842,242 5,260,525

Investment income 3,466,916 3,098,868

Net fair value gain/(loss) on assets at fair value 282,351 (147,295)
Other operating income 408,583 3,743,767
Gain on non-current assets distributed to owners - 261,083
Employee benefit expenses and other operating expenses (5,202,812) (5,804,280)
(1,044,962) 1,152,143

Finance cost - -
Net impairment gains/(losses) 4,633 872

Profit before tax 6,801,913 6,413,540

Income taxes (243,591) (783,473)

Profit for the year 6,558,322 5,630,067

Other comprehensive income:

Fair value changes on available for sale financial assets 630,037 (1,334,214)
Net amount transferred to income statement - -
Revaluation gain on land & building 49,376 81,962
Other comprehensive income for the year, net of tax 679,413 (1,252,252)

Total comprehensive income 7,237,735 4,377,815

162 ANNUAL REPORT
& ACCOUNTS 2019

General Insurance Business

Revenue Account
For the year ended 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

SPECIAL
MOTOR FIRE GEN. ACC. AGRIC. MARINE BOND ENGINEERING RISK 2019 TOTAL 2018 TOTAL

INCOME
Gross premium written 3,805,485 3,337,732 1,725,193 575,262 1,703,654 893,522 1,035,189 21,970,495 35,046,533 30,238,298

Less: Increase/ (decrease) in

unearned premium (201,391) (169,810) (140,834) 210,533 32,807 (23,978) 145,410 (939,232) (1,086,495) 486,041
Gross premiums earned 3,604,094 3,167,922 1,584,359 785,796 1,736,460 869,544 1,180,599 21,031,263 33,960,038 30,724,339

Reinsurance cost (155,277) (1,825,021) (352,460) (392,672) (774,742) (444,498) (286,228) (13,162,766) (17,393,664) (15,490,929)
Net premium earned 3,448,817 1,342,901 1,231,899 393,124 961,718 425,047 894,372 7,868,497 16,566,374 15,233,410

Commissions earned 68,068 771,957 162,498 66,969 246,975 82,536 97,039 1,273,204 2,769,245 1,727,104

Total underwriting income 3,516,885 2,114,858 1,394,397 460,093 1,208,693 507,582 991,411 9,141,702 19,335,619 16,960,514

EXPENSES
Gross claims paid (2,125,008) (2,161,387) (310,666) (270,030) (766,765) (641,504) (162,234) (3,115,261) (9,552,855) (21,819,387)

Increase/(decrease) in outstanding
claims provision (389,171) 300,017 (161,283) (21,223) (493,169) 265,527 (31,013) 5,148,242 4,617,927 (10,838,510)
Gross claims incurred (2,514,179) (1,861,370) (471,949) (291,253) (1,259,934) (375,977) (193,247) 2,032,981 (4,934,928) (32,657,897)

Deduct: reinsurance claims

recoveries/recoverable 186,425 308,447 (3,456) 144,304 195,516 (91,347) 104,508 (2,258,037) (1,413,640) 24,263,165
Net claims incurred (2,327,755) (1,552,923) (475,405) (146,949) (1,064,418) (467,324) (88,739) (225,057) (6,348,568) (8,394,732)

Add: Underwriting expenses:

Commission expenses (472,507) (619,820) (306,703) (69,986) (275,202) (8,943) (201,226) (899,071) (2,853,458) (2,767,960)
Acquisition expenses (254,579) (223,287) (115,412) (38,484) (113,971) (59,775) (69,252) (1,416,593) (2,291,351) (537,297)
Maintenance expenses
(727,086) (843,107) (422,115) (108,470) (389,173) (68,718) (270,478) (2,315,664) (5,144,809) (3,305,257)

Total expenses and claims incurred (3,054,841) (2,396,030) (897,520) (255,419) (1,453,591) (536,042) (359,217) (2,540,721) (11,493,377) (11,699,989)

Underwriting profit/(loss) 462,044 (281,172) 496,877 204,674 (244,898) (28,459) 632,193 6,600,982 7,842,241 5,260,525
ANNUAL REPORT
& ACCOUNTS 2019 163
Financial Performance

General Insurance Business

31-Dec-19 31-Dec-18 % Change

Gross Premium 35,046,533 30,238,298 16%

Net Premium 16,566,374 15,233,411 9%
Total Underwriting Income 19,335,619 16,960,515 14%
Investment Income 3,466,916 3,098,868 12%
Claims expenses (6,348,569) (8,394,733) -24%
Annuity Claim - - 0%
Underwriting expenses (5,144,809) (3,305,257) 56%
Underwriting Profit 7,842,242 5,260,525 49%
Operating expenses (5,202,812) (5,804,280) -10%
Profit before tax 6,801,913 6,413,540 6%

Earnings per share 53kobo 53kobo

Performance ratios
Using Gross Written Premium Using Net Written Premium
31-Dec-19 31-Dec-18 31-Dec-19 31-Dec-18
Underwriting expenses ratio 15% 11% 31% 22%
Claims ratio 18% 28% 38% 55%
Operating expenses ratio 15% 19% 31% 38%
Combined ratio 48% 58% 101% 115%
Underwriting profit ratio 22% 17% 47% 35%
164 ANNUAL REPORT
& ACCOUNTS 2019

Life Business
Statement of Financial Position
As at 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

31-Dec-19 31-Dec-18
Assets
Cash and cash equivalents 4,901,658 6,117,962
Investment securities 259,700,185 179,011,913
Trade receivables 4,864 14,149
Reinsurance assets 363,717 1,052,515
Loans and other receivables 3,546,396 1,886,817
Investment in subsidiaries 2,153,425 2,153,425
Investment properties 13,133,574 12,357,981
Deferred tax assets - -
Intangible assets 58,093 110,005
Property and equipment 1,918,913 923,034
Statutory deposits 200,000 200,000

Total assets 285,980,825 203,827,801

Liabilities
Insurance contract liabilities 230,060,011 155,261,604
Investment contract liabilities 26,796,212 21,890,989
Trade payables and other liabilities 3,946,356 5,846,440
Current tax liabilities 485,224 469,368
Deferred tax liabilities 1,110,014 1,110,014

Total liabilities 262,397,817 184,578,415

Capital and reserves

Share capital 5,000,000 5,000,000
Share premium 588,575 588,575
Contingency reserve 3,836,875 3,281,379
Retained earnings 13,331,262 10,043,363
Asset revaluation reserve 166,640 154,606
Fair value reserves 659,657 181,462

Shareholders funds 23,583,009 19,249,385

Total equity and liabilities 285,980,825 203,827,801

ANNUAL REPORT
& ACCOUNTS 2019 165
Life business
Income Statement
For the year ended 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

31-Dec-19 31-Dec-18

Gross premium written 55,549,659 57,281,421

Add: reduction in unearned premium Company life (655,391) (268,532)
Gross insurance premium revenue 54,894,268 57,012,889

Reinsurance expense (562,535) (1,124,426)

Net insurance premium earned 54,331,733 55,888,463

Commission income 118,934 152,567

Total revenue 54,450,667 56,041,030

Gross benefits and claims paid (31,766,243) (25,273,553)

Increase in annuity fund (73,125,802) (30,020,421)
Increase in individual life fund (993,480) (120,183)
Claims ceded to reinsurance (335,954) 469,598
Gross change in contract liabilities (23,734) (693,006)
Underwriting expenses (2,983,897) (2,854,238)

Net Underwriting expenses (109,229,111) (58,491,803)

Total Underwriting (loss)/profit (54,778,444) (2,450,773)

Investment income 28,386,540 19,706,579

Profit/(Loss) on investment contracts 602,697 239,712
Net fair value gain/(loss) on assets at fair value 33,575,701 (11,663,959)
Other operating income 297,021 549,137
Gain on non-current assets distributed to owners - 2,670,722
Employee benefit expenses and other operating expenses (3,588,879) (4,032,930)
Result of operating activities 59,273,080 7,469,261

Finance cost - -
Net impairment gains/(losses) (10,083) 10,739

Profit before tax 4,484,552 5,029,227

Income taxes (191,159) (1,445,987)

Profit for the year 4,293,393 3,583,240

Other comprehensive income:

Fair value changes on available for sale financial assets 478,195 (1,411,271)
Foreign exchange difference on unquoted financial assets - -
Revaluation gain on land & building 12,033 (20,186)
Other comprehensive income for the year, net of tax 490,228 (1,431,457)

Total comprehensive income 4,783,621 2,151,783

166 ANNUAL REPORT
& ACCOUNTS 2019

Life Business
Revenue Accounts
For the year ended 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

Individual Group Life Annuity 2019 Total 2018 Total

Life
Income
Gross premium written 1,713,408 5,431,401 48,404,850 55,549,659 57,281,421
Decrease in unearned income - - - -
Gross premium income 1,713,408 5,431,401 48,404,850 55,549,659 57,281,421

Reinsurance expenses (9,190) (553,346) - (562,535) (1,124,426)

Premium retained 1,704,218 4,878,055 48,404,850 54,987,124 56,156,995

Commissions earned 118,934 118,934 152,567

Investment income 280,937 890,556 25,618,291 26,789,785 18,684,085
Fair value gain/ (loss) on annuity bond 121,506 385,167 32,647,414 33,154,088 (11,830,244)
Fair Value Gain on Investment property 3,810 12,076 - 15,886 23,809
Other income 55,766 176,774 (116,466) 116,073 163,183

Total income 2,166,237 6,461,560 106,554,089 115,181,889 63,350,395

Direct claims paid (847,169) (1,852,844) (1,630,480) (4,330,493) (4,248,110)

Surrenders - - - -
Annuity payments - - (27,435,750) (27,435,750) (21,025,441)
- -
Increase/(decrease) in
outstanding claims - - -

Gross claims incurred (847,169) (1,852,844) (29,066,230) (31,766,243) (25,273,551)

Deduct:

Reinsurance claims recoveries/recoverables (335,954) (335,954) 469,598

Provision for Outstanding Claims - - (693,006)
78,431 (87,244) (14,922) (23,734)
Net claims incurred (768,738) (2,276,041) (29,081,152) (32,125,931) (25,496,958)

Provision for unexpired risk (993,480) (655,391) (73,125,802) (74,774,673) (30,409,136)

Employee benefit expenses (255,550) (556,196) (120,259) (932,005) (1,287,105)

Commission expenses (359,077) (449,886) (1,649,633) (2,458,596) (2,429,383)
Maintenance expenses (12,891) (13,845) (498,565) (525,301) (422,041)
Operating expenses (1,036,803) (1,129,587) (487,395) (2,653,785) (2,658,651)

Total expenses (3,426,538) (5,080,947) (104,962,805) (113,470,291) (62,703,274)

Underwriting result (1,260,302) 1,380,613 1,591,283 1,711,598 647,121

ANNUAL REPORT
& ACCOUNTS 2019 167
Revenue Account on
Deposit Administration
For the year ended 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

Company Company
31 December 31 December
2019 2018

Income

Investment Income 3,136,011 3,640,56

Loss from sale of investment (86,188) (55,202)

Valuation gain on property - 8,696

Unrealised gains/(losses) from investment 945,711 (41,506)

Other income - -
3,995,533 3,552,556

Expenses

Acquisition expenses (474,705) (357,234)

Maintenance cost (74,158) (58,246)

Interest on Deposit Administration (1,796,214) (2,212,161)

Management Expenses (1,047,759) (685,203)

(3,392,837) (3,312,844)
PROFIT/(LOSS) FROM DEPOSIT
ADMINISTRATION 602,697 239,712
168 ANNUAL REPORT
& ACCOUNTS 2019

Financial Performance

Life Business
31-Dec-19 31-Dec-18 % Change

Gross Premium 55,549,659 57,281,421 -3%

Net Premium 54,331,733 55,888,463 -3%
Total Underwriting Income 54,450,667 56,041,030 -3%
Investment Income 28,386,540 19,706,579 44%
Claims expenses (4,330,493) (4,248,110) 2%
Annuity Claim (27,435,750) (21,025,441) 30%
Underwriting expenses (2,983,897) (2,854,238) 5%
Underwriting Profit (54,778,444) (2,450,773) 2135%
Operating expenses (3,588,879) (4,032,930) -11%
Profit before tax 4,484,552 5,029,227 -11%

Earnings per share 1.30kobo 1.30kobo

Performance ratios
Using Gross Written Premium Using Net Written Premium
31-Dec-19 31-Dec-18 31-Dec-19 31-Dec-18
Underwriting expenses ratio 5% 5% 5% 5%
Claims ratio 8% 7% 8% 8%
Operating expenses ratio 6% 7% 7% 7%
Combined ratio 20% 19% 20% 19%
Underwriting profit ratio 5% 5% 5% 5%
ANNUAL REPORT
& ACCOUNTS 2019 169
Life Business
Annuity Statement
As at 31 December 2019
(All amounts in thousands of Nigerian Naira unless otherwise stated)

Leadway Assurance Company

Annuities’ Portfolio at 31st December 2019

Annuity Business by nature, type and their operation.
Title Number of Policies Classification Operations Procedure
PRA Regulated Annuities 48,251 Risk Quotation; Provisional Agreement;
NAICOM Approval; Premium
Remittance By PFC; Despatch Policy
Document; Administration

Annuities Certain 115 Risk Quotation; Premium Remittance;

Despatch Policy Document;
Administration

Annuity Liabilities, Investment Income and Pay Out.

Title Liability As At 31st Investment Pay Out

December 2019 Income (N’000)
(N’000) (N’000)
PRA Regulated Annuities 219,963,660 25,501,825 29,066,230
Annuities Certain 671,079 94,523 -

Note: The information above corresponds with the report of the Actuarial Valuation as at 31st December 2019
The assets backing Annuity Funds are as follows:

S/N ASSETS TYPE ANNUITY ANNUITY CERTAIN

(N’000) % (N’000) %
1 Money Market 2,570,733 93 201,282 7
2 Quoted Shares 8,503,308 98 135,462 2
3 Corporate Bonds 3,856,275 100 -
4 FGN/State Bonds 204,292,389 100 334,335 0
5 Real Estate - - - -
6 Treasury bills 740,953 100 - -
7 Unquoted Securities - - - -

TOTAL 219,963,659 70 671,079 1

170 ANNUAL REPORT
& ACCOUNTS 2019

Leadway At A Glance

YEAR OF INCORPORATION 1970

COMMENCEMENT OF
OPERATIONS 1971

FINANCIAL YEAR END st

31 December

SHAREHOLDERS' FUNDS N 54 Billion (as at 31 December 2019)

TOTAL ASSET BASE N 394 Billion (as at 31 December 2019)

CLASSIFICATION All classes of Insurance, Managed Funds & Trusteeship

NUMBER OF BRANCHES 24

SUBSIDIARY Leadway Vie

ASSOCIATED COMPANIES Leadway Pensure PFA Limited

Leadway Capital & Trusts Limited
Leadway Hotels Limited
Leadway Properties & Investments Ltd.
Leadway Asset Management

NUMBER OF EMPLOYEES 313 (as at December 31, 2019)

FOUNDER Sir Hassan O. Odukale (1926-1999)

DIRECTORS General Martin Lurther Agwai (rtd.) - Chairman

Mr. Jeremy Rowse - Director
Mr. Seyi Bickersteth – Director
Mr. Odein Ajumogobia – Director
Mr. Tunde Hassan-Odukale - Managing Director/CEO
Ms. Adetola Adegbayi - Executive Director, General Business

MANAGEMENT STAFF Mr. Oye Hassan-Odukale, mfr - Managing Director/CEO - Retired 31 December, 2019
Mr. Tunde Hassan-Odukale - Managing Director/CEO - Appointed 1 January, 2020
Ms. Adetola Adegbayi – Executive Director, General Insurance
Mr. Tinashe Muyambo – Head, Life Business
Mr. Gboyega Lesi – Commercial Director
Mr. Allan Olufade Suradj – Regional Director
Mrs. Kunbi Adeoti – Human Resources Director
Mr. Odalo Aimufia – Chief Information Officer
Mr. Ernest Aziagba – General Insurance Actuary
Mr. Tunde Alao-Olaifa – Strategy & Special Projects Director
Mr. Oluwafemi Adebayo – Life Sales Director
Mr. Bamidele Lawal – Chief Technical Officer
Mrs. Kikelomo Fischer – Enterprise Risk Management Director
Mr. Olumide Hanson – Company Secretary
ANNUAL REPORT
& ACCOUNTS 2019 171
Branch Network Registered office:
NN 28/ 29 Constitution Road, Kaduna.
Corporate office:
121/123 Funso Williams Avenue, Iponri Lagos.
Branch Offices
ABEOKUTA IKEJA* UYO
Seriki Fadare Plaza, beside Nigeria 77 Opebi Road, Ikeja, Lagos 140, Atiku Abubakar Way Uyo
Immigration office, 08129997012 08129997100, 08129997155
Oke-Mosan, Abeokuta
08129997096, 08129997097 ILORIN SAGAMU
163, Ajase-Ipo.Road, Gaa-Akanbi 13 Isale Oko Road, Sagamu
ABUJA Junction Road. 08129997101, 08129997156
Leadway House Plot 1061, Herbert Anu Oluwapa Complex Ilorin,
Macaulay Way Kwara State SOKOTO
Central Business District, Cadastral Zone. 08129997153, 08129997157 15A, Kano Road Not Far
Abuja From Central Of Nigeria, Sokoto.
08129997114, 08129997115 JOS 08129997124
2A Ibrahim Taiwo Rd,GRA Jos
AKURE 08129997122, 08129997123 WARRI
NACRDB Building, Ado-Owo Road Ecobank Building 60 Effurun/Sapele Road
Alagabaka Akure KANO Warri
08129997104, 08129997159 Fustan House 25 Zaria Road 08129997111, 08129997166
Gyadi-Gyadi Round About, Kano
BENIN 08129997112, 08129997168 ZARIA
49 Akpakpava Road, Benin City Last floor, UBA building by PZ Kaduna
08129997103, 08129997158 LEKKI Road Zaria
Garnet Building, Igbo-Efon by 2nd 08129997125
CALABAR round-about
141, Ndidem Usang Iso Road/ Marian along Lekki-Epe Expreway, Lekki, MARINA
Road, Lagos 24 Campbell Street, Lagos Island
Calabar, Cross River 08129997009 08129997011
08129997098, 08129997099
MAKURDI
Enugu Last Floor, 8 Railway bye pass, High * Asterisked offices are domiciled in Lagos
Akalaka House (2nd floor) 127/129 Level,
Chime Avenue near Zenith bank, Makurdi
New Haven, Enugu 08129997113
08129997106, 08129997161
OSOGBO
FESTAC* 2nd floor, Moye House
Twin Place, Plot 2015 Block, 18A, Km2,Gbogan /Ibadan
Amuwo- Odofin Govt. Scheme by Apple Road Oshogbo,Osun State
Bus/stop 08129997108, 08129997163
Festac Link Road, Festac, Lagos
08129997005 PORT HARCOURT
8 Igbodo Street, Old GRA, Port
IBADAN Harcourt
25, Morgaji Are Rd,Iyaganku GRA 08129997109, 08129997110
Off Moshood Abiola Way,Ibadan
08129997102, 081299971629
 172 ANNUAL REPORT
& ACCOUNTS 2019

Subsidiary
Leadway Vie
Leadway Assurance Company Limited gained inroads into Cote d’Ivoire through the acquisition of a Life Insurance Company. Our decision to expand into Cote d’Ivoire was a result of the
identified opportunity in the Ivorian Market. Increasing institutional Investment in the country has resulted to increasing economic activities. We started operating as Leadway Vie on the
30th of September, 2018 upon receiving regulatory approval for the acquisition and name change.

In a market that has created so much reputational damage to insurance through value eroding products, there exists both the opportunity to gain market share from acting fairly and a
discouragement of customers to buy insurance. Our goal is to encourage customers to embrace the change. We aim to become Ivory Coast’s foremost insurance company, following in the
steps of its parent brand in ensuring integrity, service, customer focus, openness, respect for the individual and excellence (iSCORE). Leadway Vie is the transparent insurer; we listen more
than we speak and we are open to our Customers.

The Company intends to transform the insurance space by becoming the leading digital Insurance Company in Cote d’Ivoire.

Associated Companies
Leadway Pensure PFA
Leadway Pensure PFA Limited was incorporated on the 25th day of August 2004 in accordance with the provisions of the Pension Reforms Act 2004 to carry on the services of a Pension
Fund Administrator [PFA], and was duly licensed by the National Pensions Commission (PenCom) in 2005. We have an authorised and Paid-up share capital of N2.0 Billion. As at December
31st 2017, their shareholders fund stood at 5.018 billion, unimpaired by losses. The principal goal of the company is to provide effective support to contributors in securing a comfortable
retirement, by offering world class pension fund management and administration services.

Overall, Leadway Pensure PFA is considered in the individual and corporate market as being Strong, Progressive and driven by Integrity, having successfully managed funds and provided
enviable returns. With a responsive complaints resolution and feedback system, the business interacts and stays close to its customers in order to nurture and retain them, always available to
take their numerous customers through the process of attaining desirable financial status at retirement.

Leadway Capital & Trusts

Leadway Capital & Trusts Limited is a subsidiary of the Leadway Holding Company. The reputation enjoyed by the Leadway brand has been attained and sustained by the pursuit of
improvements to maintain competitive advantage. All aspects of the business are approached with discipline – the recruitment of staff, development of products, use of advanced technology
to final service delivery.

Since incorporation, the company has been providing trusteeship services in diverse arrangements. Specifically, Leadway Capital & Trusts Limited provides professional services in the
following areas:

Short Term Financing for pre-qualified transactions, Equipment Leasing to select Corporate Bodies, as well as Investing in varied transactions where management finds it expedient. Leadway
Capital and Trusts Limited is able to tap into the resources and over 45-year experience of the Leadway brand.

Address:
121/123 Funso Williams Avenue, Iponri, Surulere, Lagos; P.O. Box 6437, Marina, Lagos. Tel: 01-2700700 Fax: 01-2700800, E-mail: trustees@leadway.com, Website:
www.leadwaycapital.com

Leadway Hotels
Leadway Hotels Limited, incorporated March 2005, is a subsidiary of Leadway Holding Company and an up-and-coming player in the hospitality industry in Nigeria. It aims to become a
distinctly recognized brand in the hospitality and service industry. Leadway Hotels Limited is dedicated to quality and services and has a reputation for service efficiency and customers’
reliability. For almost a decade, the Leadway Hotels Limited, has honoured its hospitality commitments and has earned its reputation of excellence in this regard. All aspects of the business
are approached with discipline; the recruitment of staff, the advancement of technologies and the corporate/personal service offered to its growing clientele.

Under its umbrella are three notable and thriving businesses in Lagos and Abuja, namely, Leadway Hotel in Ikeja, Le´ola Suites and Panache Restaurant, both in Abuja. One of the strengths of
the company is its ability to effectively coordinate these businesses with innovative prowess which is helping it carve a niche within the hospitality industry in Nigeria. These are evident in the
excellent local and international cuisine offered to its diverse guests. Its Restaurants boasts of a menu selection that is varied enough to cater for all tastes.

Operating Address: Leadway Hotel, Ikeja. 1 Mugambo Close, Maryland Estate, Lagos. Nigeria.
Tel:+2341 2790800/0802/0803/0806, Fax:+2341 2790801, E-mail: reservations@leadway.com
Leola Suites/Panache Restaurant Leadway House (near NNPC Towers) 1061 Herbert Macaulay Way Central Business District Abuja, Nigeria.

Leadway Properties & Investment Limited

Leadway Properties & Investment Limited, a wholly-owned subsidiary of Leadway Holding Company, is a property development company involved in the acquisition, development,
management and sales of high quality, serviced commercial and residential properties in the Nigerian real estate market.

Ÿ Trusts of Consortium Lending Ÿ Custodian Trusteeship

Ÿ Debenture Trusts Ÿ Nominee Shareholding Management of other Trusts as Endowments, Foundations and Co-operatives
Ÿ Unit Trusts and Mutual Funds Ÿ Preparation of Wills
Ÿ Mortgage Trusts Ÿ Living Trusts
Ÿ Investment Trusts Ÿ Education Trusts
Ÿ Leasing Trusts Ÿ Public Trusts
Ÿ Employee Share Ownership Trusts

Leadway Asset Management

Leadway Asset Management is a wholly owned subsidiary of the Leadway Holdings and an associated company with Leadway Assurance Company Limited. We are a full service asset
management company providing wealth management services to high net worth and ultra-high net worth individuals, portfolio and advisory services to institutions and investment solutions
to retail clients.

As a company, Leadway Asset Management leverages the strength and experience of the company and Swiss RE brands to offer tailor-made investment solutions to her clients, helping them
meet their long term investment objectives