Quarter 3 - financial statement for 2025

RC 11785

Corporate Information 1

Results at a glance 2

Vision, Mission and Values 3

Our Commitments 4

Consolidated and Separate Statement of Financial Position 6

Consolidated and Separate Statements Profit or Loss and Other Comprehensive Income 7

Consolidated and Separate Statements of Changes in Equity 8

Consolidated and Separate Statements of Cash Flows 10

Notes to the Consolidated and Separate Financial Statements 11

Value Added Statement 112

Five-Year Financial Summary 113

Mr. Nahim Abe Ibraheem Non-Executive Director - Chairman (Resigned 2 May, 2025) Mr. Babatunde Ayokunle Irukera Non-Executive Director - Chairman (Appointed 31 July, 2025) Dr. Oluwafunsho A. Obasanjo Non-Executive Director

Mr. Aminu Babangida Non-Executive Director

Hajia Yabawa Lawan Wabi (MNI) Non-Executive Director

Mrs Priya Heal (British) Non-Executive Director

Emmanuel Etuh Non-Executive Director

Mr. Paul Oki Independent Non-Executive Director

Dr. Adaobi Nwakuche Managing Director/CEO

Mr. Sunkanmi Adekeye Executive Director, Operations

Ms. Saratu Umar Garba African Reinsurance Corporation

FRC/2019/NBA/00000019159 Continental Reinsurance Corporation WAICA Reinsurance Corporation

Plot 497, Abogo Largema Street, CK Reinsurance Limited

Off Constitution Avenue, Score Re.

Central Business District CICA Re. Abuja.

https://www.veritaskapital.com ACTUARIES

RC NO: 11785 O & A Hedge Actuarial Consulting (Consulting Actuaries & Chartered Insurers) Suite 28, Motorways Centre

FRC/2013/0000000000717 1 Motorways Avenue

Alausa Ikeja - Lagos, Nigeria

Unity Bank Plc Unity Registrars Limited

Guaranty Trust Bank Ltd. 25 Ogunlana Drive

First Bank Limited Surulere Lagos. Fidelity Bank Plc

Keystone Bank Limited AUDITORS

Sterling Bank Plc Ernst & Young Nigeria

Access Bank Plc (Chartered Accountants)

Zenith Bank Plc 10th & 13th Floor, UBA House, 57 Marina, Lagos, Nigeria

Jide Taiwo & Co Kreston Pedabo Professional Services No 70 Abidjan street wuse zone 3 67 Norman Williams Street, Ikoyi, Lagos Abuja-FCT

National Insurance Commission

Tax Identification Number 01129230-0001

To help our Stakeholders have peace of mind

To be one of the top Insurance Companies of choice in Africa

We will act with openness, fairness, integrity and diligence. We will always adhere to the applicable laws, regulations and standards of doing business.

We will promote a positive and challenging high performance culture. We will do this by encouraging personal accountability, development and measuring, reward and recognizing success.

We will act responsibly as individuals and as a Company. This applies to the management of our business, our approach to corporate interaction with key external stakeholders.

Working in teams Servicing our Customers Respecting each other Being proactive

Growing our people

Delivering to our Shareholders Guarding against arrogance

Upholding the highest levels of integrity

OUR COMMITMENTS

Customers

A satisfied and loyal customer base is core to our business.

We are committed to:

• Delivering the consistent and reliable levels of customer service.

• Acting with integrity, due care and diligence.

• Communicating openly, honestly and with sensitivity and understanding.

• Listening to our customers.

• Handling complaints fairly and promptly.

• Respecting our customers' rights to privacy and confidentiality.

• Protecting our customers and our business from fraud.

  Business Partners

  We demand high standards from the companies we work with and believe that they should expect the same from us.

  We are committed to:

• Carrying out our business with fairness and integrity.

• Being reliable and quick to respond.

• Awarding contracts and selecting business partners solely on the basis of fair and objective business criteria and having regards to high ethical standards.

• Respecting all obligations and confidentiality.

• Protecting our customers and our business from fraud.

  Employees

  Motivated and skilled employees are critical to our success.

  We are committed to:

• Fostering a positive and challenging high performance culture.

• Rewarding superior performance.

• Encouraging personal development.

• Encouraging a culture of frank and honest communication.

• Encouraging teamwork and strong leadership.

• Providing a safe and secure working environment.

• Encouraging diversity and equal opportunities.

• Ensuring that grievances and unethical behaviour can be raised without fear of discrimination.

  In return we expect our employees to:

• Act with integrity.

• Take responsibility and accountability for their own actions.

• Show support and commitment for change.

• Focus their energy in getting the best from themselves and others.

• Have the confidence and courage to act with conviction.

• Show understanding for and meet external and internal customers needs.

• Show a relentless desire for success.

• Create positive and effective working relationships.

  OUR COMMITMENTS - CONTINUED

  Regulators

  We have an open, cooperative and transparent relationship with our regulators.

  We are committed to:

• Dealing with our regulators in an open, cooperative and transparent manner.

• Managing our business with appropriate standards of risk management and controls.

• Preventing and reporting any instances of significant financial crime.

• Preventing breaches of relevant regulatory requirements.

• Complying with all set standards.

  Community & Environment

  We believe in continuous improvement of our environmental performance and in taking action around emerging environmental issues. Whenever we operate, we will seek positive engagement with local communities.

  We are committed to:

• As a business, we have a responsibilty to manage our impacts on the environment through appropriate use of resources such as energy, paper and water and the investment of our assets.

• We also have a responsibility to take proactive action on environmental issues that are likely to affect our business and community at large.

• In each of these areas, we will look to make continuous improvement and actively monitor our performance.

  Shareholders

  We are committed to fufilling the aspirations of our shareholders through a commitment to business performance, and high standards of transparency, communication and corporate governance.

  We are committed to:

• A culture of business performance, focused on delivering returns to shareholders.

• Comprehensive and transparent disclosure.

• Aiding Shareholder's understanding through the disclosure of relevant financial and non-financial information.

• Listening to the views of our shareholders.

• Managing our business with appropriate standards of risk and control.

• Ensuring due care in the selection of our third party advisers, including our auditors.

• Preventing and reporting any market abuse.

• Acting with due sense of responsibilty on confidence entrusted to us.

These financial statements were approved by the Board on 27 October 2025 and signed on its behalf by:

……………………………......................... ……………………………...............

Mojeed Somorin Dr. Adaobi Nwakuche

Chief Financial Officer Managing Director

FRC/2017/PRO/ICAN/001/00000016849 FRC/2021/003/00000023865

The statement of material accounting policies and the accompanying notes to the consolidated and separate financial statements form an integral part of these financial statements.

CONSOLIDATED AND SEPARATE STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR PERIOD ENDED 30 SEPTEMBER 2025

CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY FOR PERIOD ENDED 30 SEPTEMBER 2025

Group

Share Capital Share Premium N'000 N'000

Asset revaluation

reserve N'000

Fair value reserve N'000

Contingency

Reserve Retained Earnings N'000 N'000

Total N'000

Non-Controlling

Interest N'000

Total N'000

At 1 January 2025 6,933,333 663,600 3,974,282 275,880 2,611,284 (1,189,504) 13,268,875 2,016,863 15,285,738

Profit for the year - - - - - 3,940,914 3,940,914 202,135 4,143,049

Other Comprehensive Income: -

Gain on revaluation of properties, plant and equipment - - - - - - - - -Fair value gain on financial asset at FVOCI - - - - - - - - -Transfer to statutory reserve - - 43,602 43,602

Transfer of revaluation gain on disposal of PPE - - - - - - - - -Acturial gain on retirement benefit obligation - - - - - - - - -

Total Comprehensive Income Transfer to Contingency Reserve Transactions with owners of equity Dividends to equity holders

-

-

-

-

-

-

-

-

-

678,200

3,940,914

(678,200)

3,940,914

-

245,737

-

4,186,651

-

-

-

-

-

-

(4,012)

(4,012)

(279)

(4,291)

At 1 January 2024

Profit for the year

Other Comprehensive Income:

Gain on revaluation of properties, plant and equipment Fair value gain on financial asset at FVOCI

Transfer of revaluation gain on disposal of PPE Acturial gain on retirement benefit obligation Total Comprehensive Income

Transfer to Contingency Reserve Transactions with owners of equity: Dividends to equity holders

Share Capital Share Premium N'000 N'000

6,933,333 663,600

- -

Asset revaluation

reserve N'000

3,634,971

-

Fair value reserve N'000 235,984

-

Contingency

Reserve Retained Earnings N'000 N'000

1,900,456 1,008,862

- 2,721,390

Non-Controlling

Interest N'000

1,991,597

145,713

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

981,610

-

-

-

-

2,721,390

(981,610)

Total N'000 14,377,206

2,721,390

-

-

-

-

-

2,721,390

-

-

-

-

-

145,713

-

Total N'000 16,368,802

2,867,103

-

-

-

-

-

2,867,103

-

-

-

-

-

-

-

-

-

-

At 30 September 2024 6,933,333 663,600 3,634,971 235,984 2,882,066 2,748,642 17,098,596 2,137,310 19,235,905

At 30 September 2025 6,933,333 663,600 3,974,282 275,880 3,289,484 2,069,198 17,205,777 2,262,322 19,468,099

CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY FOR PERIOD ENDED 30 SEPTEMBER 2025

The statement of material accounting policies and the accompanying notes to the Consolidated and separate financial statements form an integral part of these financial statements.

Consolidated and Separate Unaudited Financial Statements

For the period ended 30 September 2025

The statement of material accounting policies and the accompanying notes to the Consolidated and separate financial statements form an integral part of these financial statements.

In the process of applying the accounting policies adopted by the group and company, the Directors make certain judgements and estimates that may affect the carrying values of assets and liabilities in the next financial period. Such judgements and estimates are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the current circumstances. the directors evaluate these at each financial reporting date to ensure that they are still reasonable under the prevailing circumstances based on the information available.

The preparation of the group's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future. These factors should include:

The judgements made by the Directors in the process of applying the group's accounting policies that have the most significant effect on the amounts recognized in the financial statements include:

• Claims arising from insurance contracts

  Liabilities for unpaid claims are estimated on a case-by-case basis. The liabilities recognized for claims fluctuate based on the nature and severity of the claim reported. Claims incurred but not reported are determined using statistical analyses and the group deems liabilities reported as adequate.

• Fair value of unquoted equity financial instruments

  The fair value of financial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. In these cases, the fair values are estimated from observable data using valuation models.

• Property, Plant and equipment

  Property, Plant and equipment represent one of the most significant proportions of the asset base of the group, accounting for about 26% of the group's total assets. Therefore, the estimates and assumptions made to determine their carrying value and related depreciation are critical to the group's financial position and performance.

  The charge in respect of periodic depreciation is derived after determining an estimate of an asset's expected useful life and the expected residual value at the end of its life. Increasing an asset's expected life or its residual value would result in the reduced depreciation charge in the statement of comprehensive income.

  The useful lives and residual values of the property, plant and equipment are determined by management based on historical experience as well as anticipation of future events and circumstances which may impact their useful lives.

• Goodwill

Goodwill is tested for impairment annually or whenever we identify certain triggering events or circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Events or circumstances that might indicate an interim evaluation is warranted include, among

The consolidated and separate financial statements are presented in Nigerian Naira (Naira), rounded to the nearest thousand, this is also the functional currency of the group.

1. Summary of material accounting policies

   1. Introduction to summary of accounting policies

      The material accounting policies applied in the preparation of these consolidated and separate financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

   2. Insurance contracts
      1. Key types of insurance contracts issued, reinsurance contracts held and measurement approach.

         The Group issues non-life insurance to individuals and businesses. Non-life insurance products offered include motor, general accident, marine, fire bond, oil & gas, engineering and agriculture. These products offer protection of policyholder's assets and indemnification of other parties that have suffered damage as a result of a policyholder's accident.

         The company accounts for these contracts applying the Premium Allocation Approach (PAA).

         The company also holds reinsurance contracts to mitigate risk exposures. The types of reinsurance contracts held include -facultative reinsurance, treaty Reinsurance. proportional reinsurance, non-proportional reinsurance. These are also accounted for using the Premium Allocation Approach (PAA).

         2 Summary of material accounting policies - continued 2.2 Insurance contracts - continued
      2. Definition and Classification

         Insurance products sold by the company are classified as insurance contracts when the company accepts significant insurance risk from a policyholder by agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder. This assessment is made on a contract-by-contract basis at the contract issue date. In making this assessment, the company considers all its substantive rights and obligations, whether they arise from contract, law or regulation. The company determines whether a contract contains significant insurance risk by assessing if an insured event could cause the company to pay to the policyholder additional amounts that are significant in any single scenario with commercial substance even if the insured event is extremely unlikely or the expected present value of the contingent cash flows is a small proportion of the expected present value of the remaining cash flows from the insurance contract. The company does not issue any contracts with direct participating features.

         The company has assessed whether its portfolio of insurance contracts needs to be treated as a single contract and if there exist any embedded derivatives investment components and goods and services components, which would have to be separated and accounted for under another standard. There is currently no product with such components.

      3. Combining a set or series of contracts

         Sometimes, the company enters into two or more contracts at the same time with the same or related counterparties to achieve an overall commercial effect. The company accounts for such a set of contracts as a single insurance contract when this reflects the substance of the contracts. When making this assessment, the company considers whether:

         i· The rights and obligations are different when looked at together compared to when looked at individually. ii· The company is unable to measure one contract without considering the other.

      4. Separating components from insurance and reinsurance contracts

         In line with the requirement of IFRS 17, the company assesses its insurance and reinsurance products to determine whether they contain components which must be accounted for under another IFRS rather than IFRS 17 (distinct non-insurance components). After separating any distinct components, an entity must apply IFRS 17 to all remaining components of the (host) insurance contract.

         Currently, the company's products do not include distinct components that require separation.

         2 Summary of material accounting policies - continued 2.2 Insurance contracts - continued
      5. Level of aggregation (Unit of account)

         IFRS 17 requires an entity to determine the level of aggregation for applying its requirements. The company identifies portfolios by aggregating insurance contracts that are subject to similar risks and managed together. In grouping insurance contracts into portfolios, the company considers the similarity of risks rather than the specific labelling of product lines. The company has determined that all contracts within each product line, as defined for management purposes, have similar risks. Therefore, when contracts are managed together, they represent a portfolio of contracts. Each portfolio is subdivided into groups of contracts to which the recognition and measurement requirements of IFRS 17 are applied. At initial recognition, the company segregates contracts based on when they were issued. A cohort contains all contracts that were issued within a 12-month period. Each cohort is then further disaggregated into three groups of contracts:

         • Contracts that are onerous on initial recognition

         • Contracts that, on initial recognition, have no significant possibility of becoming onerous subsequently

         • Any remaining contracts

           For short term contracts accounted for applying the PAA, the company determines that contracts are not onerous on initial recognition, unless there are facts and circumstances indicating otherwise. As IFRS 17 does not define what "facts/circumstances" entail; the following are considered on their impact on expected cashflows and resulting profitability:

           -Significant changes in external conditions including economic or regulatory changes.

           -Changes to the organization or processes

           -Changes in underwriting and pricing strategies

           -Trends in experience and expected variability in cashflows

           This consideration is only required for Liabilities for Remaining Claims (LRC) and not Liabilities for Incurred Claims (LIC) which is already measured at the current fulfillment value. Fulfillment cashflows can be estimated at whichever aggregate level is deemed appropriate and then subsequently allocated into IFRS 17 portfolios and groups. The fact that incurred claims of a particular cohort are loss-making does not mean the LRC will also be onerous. Judgment is applied to determine whether each cohort's LRC will be similar to this incurred experience and hence onerous. For example, actions taken to improve profitability a historically loss-making cohort may indicate that the cohort will be non-onerous going forward.

           All short-term contracts have currently been assessed as having no possibility of becoming onerous. In

           subsequent periods, non-onerous contracts are re-assessed based on the likelihood of prevailing facts and circumstances leading to significant possibility of becoming onerous.

           Reinsurance contracts held are assessed for aggregation on an individual contract basis and are assessed separately from insurance contracts. The smallest unit of account is a reinsurance contract, even where this contract covers more than one type of insurance product. However, there are cases where a reinsurance contract covers separate and identifiable product lines which are only included in the same legal document for administrative convenience. These contracts have been separated into its different component.

           If two or more reinsurance contracts are written on a particular product line, these may be grouped together in the same portfolio as they will be covering risks of the same nature and will be managed together. For example, the Surplus contracts (1&2) on Fire have been grouped together as they cover risks of the same nature and can be measured under the same measurement approach (PAA because they have a contract boundary of 1 year). While, facultative and excess of loss contracts are in separate groups; though they cover the same risks and are even managed together, differing measurement approaches as well as recognition requirements may apply.

      6. Recognition

         The company recognizes groups of insurance contracts issued from the date when the first payment from a policyholder in the group becomes due. As the company adheres to the statutory "no premium no cover", the date premium is received from the policyholder will always be earlier or on the same date as the coverage period. This premium receipt date would then be used to separate the groups of insurance contracts into yearly cohorts. The contract groupings shall not be reassessed until they are derecognized.

      7. Contract Boundaries

         The company includes in the measurement of a group of insurance contracts all the future cash flows within the boundary of each contract in the group. Cash flows are within the boundary of an insurance contract if they arise from substantive rights and obligations that exist during the reporting period in which the Group can compel the policyholder to pay the premiums, or in which the Group has a substantive obligation to provide the policyholder with insurance contract services. A substantive obligation to provide insurance contract services ends when:

         • The Company has the practical ability to reassess the risks of the particular policyholder and, as a result, can set a price or level of benefits that fully reflects those risks Or

         • Both of the following criteria are satisfied:

         • The Company has the practical ability to reassess the risks of the portfolio of insurance contracts that contain the contract and, as a result, can set a price or level of benefits that fully reflects the risk of that portfolio.

           2.2 Insurance contracts - continued

           • The pricing of the premiums up to the date when the risks are reassessed does not take into account the risks that relate to periods after the reassessment date.

           A liability or asset relating to expected premiums or claims outside the boundary of the insurance contract are not recognized. Such amounts relate to future insurance contracts.

      8. Measurement of insurance contracts issued.

Discount Rate

The time value of money and financial risk is measured separately from expected future cash flows with

changes in financial risks recognized in profit or loss at the end of each reporting period unless the Company has elected the accounting policy to present the time value of money separately in profit or loss and other comprehensive income. The Company measures the time value of money using discount rates that reflect the liquidity characteristics of the insurance contracts and the characteristics of the cash flows, consistent with observable current market prices. They exclude the effect of factors that influence such observable market prices but do not affect the future cash flows of the insurance contracts (e.g., credit risk).

In determining discount rates for cash flows, the Company uses the 'bottom-up approach' to estimate discount rates starting from a risk-free rate with similar characteristics, plus an illiquidity premium where applicable. Risk free rates are determined by reference to the yields of highly liquid FGN Bonds. The illiquidity premium is determined by reference to observable market rates, including sovereign debt, corporate debt and market swap rates. However, for the current year the company has adopted a Bottom-up approach which was adopted in setting the average discount rate for the liability valuation, having regard to the published yield curve by the Nigeria Actuarial Society (NAS) on its website or on the NAICOM website and adjusts it to reflect the illiquidity in the insurance contracts. An average spot/zero curve locked in rate of 28.20% per year was adopted to estimate the value of the future expected cashflows from the liability for incurred claims (LIC) obligations as at the valuation date. No deduction for illiquidity premium and No (additional) spread has been applied. The NAS interest curve used to discount future cash flows is derived from the published yield curve by the Nigeria Actuarial Society (NAS) on its website or on the NAICOM website and adjusts it to reflect the illiquidity in the insurance contracts with similar characteristics (in terms of timing, currency and liquidity requirements) as the future fulfillment cashflows.

Risk adjustment for non-financial risk

The Company measures the compensation it would require for bearing the uncertainty about the amount and timing of cash flows arising from insurance contracts, other than financial risk, separately as an adjustment for non-financial risk.

The company adopts the Value at Risk approach as a measure of the risk adjustment for non-financial risks. The Confidence level used was set at 75th percentile in determining the discounted best estimate liability for incurred claims. This also applies to the reinsurance held.

A full IFRS 17 liability distribution is generated across all non-financial risks and the risk adjustment is

calculated as the difference between the best estimate liability and the liability value at the chosen confidence level. This is allocated to all the group of insurance contracts. Diversification benefits are derived from a study of the negative correlation that exists among the different non-financial variables impacting the cash flows from the portfolios of the Company and results in lower economic capital being necessary to absorb the residual level of uncertainty.

A bootstrap (Mack) stochastic reserving approach was used to derive the risk margin or risk adjustment in the above.

The Confidence level used in the calculation of the company's technical provisions was set at an

average of 75th percentile (75% confidence level) yielding 16.97% of the discounted best estimate liability for incurred claims. The risk adjustment as a proportion of the discounted liability at 99.5% confidence level using VAR method would be 252,0%. This also applies to the reinsurance held. "

Premium Allocation Approach (PAA)

This is a simplification of the general model. The Company applies the PAA to the measurement of non-life insurance contracts with a coverage period of each contract in the group of one year or less.

Contracts with coverage period above one year which are not immediately eligible for the PAA, will be subjected to a PAA eligibility by assessing the expected LRC cashflows under both the PAA and General Model approaches. However, there is no material difference in the measurement of the liability for remaining coverage between PAA and the general model, therefore, these qualify for PAA.

On initial recognition, the company measures the carrying amount of the Liability for remaining coverage for insurance contracts held as the premiums received - Gross Written premium

At subsequent measurement, the LRC is effectively the unearned premium reserve (UPR) under IFRS 4 less the deferred acquisition costs (DAC). Unlike IFRS 4, DAC will not be presented as an asset under IFRS17. It is instead reflected in the overall insurance contract liability for remaining coverage, without being identified as a separate component in the statement of financial position.

Premium Experience Adjustment: Where premium experience adjustments relate to current/ past service and are treated at the end of the period, this will be immediately recognized in the P&L as insurance revenue.

Insurance acquisition cash flows

IFRS 17 defines insurance acquisition cash flows as cash flows arising from the costs of selling, underwriting

and starting a group of insurance contracts that are directly attributable to the portfolio of insurance contracts to which the group belongs. These include direct and indirect costs incurred in originating insurance contracts, including cashflows related to unsuccessful efforts to obtain new business.

Under the PAA, an entity can choose to immediately expense insurance acquisition cash flows in the P&L when incurred if and only if each insurance contract in a group has a coverage period of one year or less. The company has opted not to expense acquisition cash flows immediately when incurred. Alternatively, an entity can recognize insurance acquisition cash flows in the measurement of liability for remaining coverage (LRC) and amortize insurance acquisition cash flows in the P&L (systematically - in line with earning pattern of premium revenue OR passage of time, with the former being the method adopted by the Company).

The exiting IFRS 4 approach is to recognize a separate deferred acquisition cost (DAC) assets for costs associated with writing new insurance contracts (e.g., commissions paid to brokers). Under IFRS 17, if acquisition costs are paid before the related insurance groups are recognized, an entity shall recognize an asset. These assets are derecognized when the group of insurance contracts are recognized. If insurance acquisition cash flows are expected to be paid after the related group is recognized, then they are included as part of the measurement of insurance contracts (LRC).

IFRS 17 allows for the deferral of acquisition costs to smooth out the recognition of profits. Paid acquisition costs are an asset that is amortized (or derecognized) when they are included in the measurement of the related group of insurance contracts. Company has chosen to defer all insurance acquisition cash flows and recognize them over the coverage period of contracts or groups they are attributed to. Therefore, acquisition costs and related revenue are recognized over the same periods and in the same pattern, based on the passage of time.

It must be noted that IFRS 17 requires allocation to future renewals if the acquisition cashflows are judged to support future renewals. Also, the expensing acquisition costs policy choice only applies for contracts with coverage period one year or less.

For contracts measured under PAA in the Company, insurance acquisition costs comprise of costs:

- that are directly attributable to individual contracts or groups of contracts in a portfolio that are not directly attributable to individual contracts but, directly attributable to the portfolio of insurance contracts to which the group belongs; with the costs being allocated to groups on a systematic and rationale method e.g., Activity- Based Costing method or based on GWP proportions or claims cost etc.

The Company considers an insurance contract to be onerous if the expected fulfilment cash flows allocated to the contract, any previously recognized acquisition cash flows and any cash flows arising from the contract at

1. Summary of material accounting policies - continued
   1. Insurance contracts - continued

      the date of initial recognition in total result in a net cash outflow.

      On initial recognition, the onerous assessment is done on an individual contract level assessing future expected cash flows on a probability-weighted basis including a risk adjustment for non-financial risk. Contracts expected on initial recognition to be loss-making are grouped together and such groups are measured and presented separately. Once contracts are allocated to a group, they are not re-allocated to another group, unless they are substantively modified.

      On initial recognition, the CSM of the group of onerous contracts is nil and the group's measurement consist entirely of fulfilment cash flows. A net outflow expected from a group of contracts determined to be onerous is considered to be the group's 'loss component'. It is initially calculated when the group is first considered to be onerous and is recognized at that date in profit or loss. The amount of the group's loss component is tracked for the purposes of presentation and subsequent measurement.

      After the loss component is recognized, the Company allocates any subsequent changes in fulfilment cash flows of the LRC on a systematic basis between the loss component and the LRC excluding the loss component. For groups of onerous contracts, without direct participating features, the Company uses locked-in discount rates. They are determined at initial recognition to calculate the changes in the estimate of future cash flows relating to future service (both changes in a loss component and reversals of a loss component).

      For all issued contracts, other than those accounted for applying the PAA, the subsequent changes in the fulfilment cash flows of the LRC to be allocated are:

      • Insurance finance income or expense

      • Changes in risk adjustment for non-financial risk recognized in profit or loss representing release from risk in the period.

      • Estimates of the present value of future cash flows for claims and expenses released from the LRC because of incurred insurance service expenses in the period.

The Company determines the systematic allocation of insurance service expenses incurred based on the percentage of loss component to the total fulfilment cash outflows included in the LRC, including the risk adjustment for nonfinancial risk, excluding any investment component amount.

For contracts that are measured under PAA, the assumption is that there are no onerous contracts at initial recognition, unless facts and circumstances indicate otherwise. If the measurement of the LIC results in a loss-making group, this does not translate to the LRC being onerous. In this case, the group will be assessed as to whether its LRC will be similar to the incurred experience and hence considered to be

1. Summary of material accounting policies - continued
   1. Insurance contracts - continued

      onerous. For example, actions taken to improve profitability on the fire portfolio which has been historically loss-making may indicate that the LRC will have a different loss experience.

      If facts and circumstances indicate that a group of contracts is onerous during the coverage period, the onerous liability is calculated as the difference between:

      • the carrying amount of the liability for remaining coverage; and

      • the FCF that relates to remaining coverage similar to what is needed under the GMM. This difference is recognized as a loss and shall increase the liability for remaining coverage.

1. Measurement of Reinsurance contracts issued.
   1. Recognition

      Proportional reinsurance contracts held will be first recognized on the later of the beginning of the coverage period of the reinsurance contract or the date that the first underlying insurance contract in the treaty is initially recognized.

      Non-Proportionate reinsurance coverage is recognized at the beginning of the coverage period of the contract.

   2. Reinsurance contracts held measured under the PAA.

All reinsurance contracts with contract boundaries not exceeding one year are automatically considered to meet PAA eligibility. Most of the company's Surplus reinsurance contracts are immediately eligible for PAA as they are written on a clean-cut basis. At the end of the period, the reinsurer withdraws from the contract and the reinsurance held portfolio (including outstanding recoveries and ceded portion of unexpired premiums) is transferred to a new reinsurer.

A smaller number of surplus reinsurance contracts and all Facultative contracts are written on an underwriting year basis. This basis extends the contract boundary beyond one year as coverage of contracts ceded to the treaty may continue even after the underwriting year has ended.

For example, if an insurance contract incepted in May 2022 and cedes to the Marine Hull Surplus reinsurance treaty (which incepted 1 January 2022); the contract boundary extends till May 2023 when the insurance contract will expire. So, the contract boundary for the reinsurance contract is beyond one year i.e., 1 Jan 2022 - May 2023.

Where the reinsurance contracts held covers a group of onerous underlying insurance contracts, the Company adjusts the carrying amount of the asset for remaining coverage and recognizes a gain when, in the same period, it reports a loss on initial recognition of an onerous group of underlying insurance contracts or on addition of onerous underlying insurance contracts to a group. The recognition of this gain

results in the recognition for the loss recovery component of the asset for the remaining coverage of a group of reinsurance contracts held.

1. Modification and Derecognition

   The Company derecognizes the original contract and recognizes the modified contract as a new contract, if the terms of insurance contracts are modified and the following conditions are met:

   • If the modified terms were included at contract inception and the Group would have concluded that the modified contract:

     - Is outside of the scope of IFRS 17

     • Results in a different insurance contract due to separating components from the host contract

     • Results in a substantially different contract

     • Would be included in a different group of contracts.

   • The original contract met the definition of an insurance contract with direct participating features, but the modified contract no longer meets the definition.

   • The original contract was accounted for applying the PAA, but the modified contract no longer meets the PAA eligibility criteria for that approach.

   When the Company derecognizes an insurance contract due to modification, it derecognizes the original insurance contract and recognizes a new one. The Company adjusts the CSM of the Company from which the modified contract has been derecognized for the difference between the change in the carrying amount of the Company as a result of adjustment to fulfilment cash flows due to derecognition and the premium the Company would have charged had it entered into a contract with equivalent terms as the new contract at the date of the contract modification, less any additional premium actually charged for the modification.

2. Presentation

The Company has presented separately in the company's statement of financial position the carrying amount of portfolios of insurance contracts that are assets and those that are liabilities, and the portfolios of reinsurance contracts held that are assets and those that are liabilities.

The Company disaggregates the amounts recognized in the consolidated and separate statement of profit or loss and other comprehensive income into an insurance service result sub-total that comprises insurance revenue and insurance service expenses and, separately from the insurance service result, the i n s u r a n c e finance income or expenses' sub-total. The company has voluntarily included the net insurance finance

income or expenses line in another sub- total: net insurance and investment result, which also includes the income from all the assets backing the Company's insurance liabilities.

The Company includes any assets for insurance acquisition cash flows recognized before the corresponding groups of insurance contracts are recognized in the carrying amount of the related portfolios of insurance contracts issued.

1. Insurance Revenue

   As the Company provides insurance services under a group of insurance contracts issued, it reduces its LRC and recognizes insurance revenue, which is measured at the amount of consideration the Company expects to be entitled to in exchange for those services.

   For groups of insurance contracts measured under the General Model, insurance revenue consists of the sum of the changes in the LRC due to:

   • The insurance service expenses incurred in the period measured at the amounts expected at the beginning of the period, excluding:

     • Amounts allocated to the loss component.

     • Repayments of investment components, if any.

     • Amounts that relate to transaction-based taxes collected on behalf of third parties. Insurance acquisition expenses.

     • Amounts relating to risk adjustment for non-financial risk.

   • The change in the risk adjustment for non-financial risk, excluding:

     • Changes that relate to future service that adjust the CSM.

     • Amounts allocated to the loss component.

   • Other amounts, such as experience adjustments for premium receipts that relate to current or past service, if any Insurance revenue also includes the portion of premiums that relate to recovering those insurance acquisition cash flows included in the insurance service expenses in each period.

     Both amounts are measured in a systematic way on the basis of the passage of time. The company applies PAA in determine its insurance revenue. When applying the PAA, the Company recognizes insurance revenue for the period based on the passage of time by allocating expected premium receipts including

     2 Summary of material accounting policies - continued 2.2 Insurance contracts - continued

     premium experience adjustments to each period of service.

     At the end of each reporting period, the Company considers whether there was a change in facts and circumstances indicating a need to change, on a prospective basis, the premium receipt allocation due to changes in the expected pattern of claim occurrence.

2. Insurance service expenses

   Insurance service expenses arising from a group of insurance contracts issued comprises:

   • Incurred claims

   • Changes in the LIC related to claims and expenses incurred in the period excluding repayment of investment components. (if any)

   • Changes in the LIC related to claims and expenses incurred in prior periods (related to past service)

   • Other directly attributable insurance service expenses incurred in the period. The company has adopted a policy of allocating average of 40% of some specific expense items to insurance service expense. The specific expense items include technical staff, business development, customer care staff salaries, marketing & advertising expenses. All other costs are allocated to operational /administrative expenses

   • Amortization of insurance acquisition cash flows, is recognized at the same amount in both insurance service expense and insurance contract revenue for products measured using the GMM Model

   • Loss component of onerous groups of contracts initially recognized in the period.

3. Income or expenses from reinsurance contracts held.

   The Company presents income or expenses from a group of reinsurance contracts held and reinsurance finance income or expenses in profit or loss for the period separately. Income or expenses from reinsurance contracts held are split into the following two amounts:

   • Amount recovered from reinsurers.

   • An allocation of the premiums paid.

     The Company presents cash flows that are contingent on claims as part of the amount recovered from reinsurers. Ceding commissions that are not contingent on claims of the underlying contracts are presented as a deduction in the premiums to be paid to the reinsurer which is then allocated to profit or loss.

     The Company establishes a loss recovery component of the asset for the remaining coverage for a group of

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     reinsurance contracts held. This depicts the recovery of losses recognized on the initial recognition of an onerous group of underlying insurance contracts or on addition of onerous underlying insurance contracts to a group. The loss recovery component adjusts the CSM of the group of reinsurance contracts held. The

     • Changes in the fulfilment cash flows of the underlying insurance contracts that relate to future service and do not adjust the CSM of the respective groups to which the underlying insurance contracts belong to.

     • Reversals of loss recovery component to the extent those reversals are not changes in the fulfilment cash flows of the group of reinsurance contracts held.

     • Allocations of the loss recovery component against the amounts recovered from reinsurers reported in line with the associated reinsured incurred claims or expenses.

4. Insurance finance income and expenses

Insurance finance income or expenses present the effect of the time value of money

and the change in the time value of money, together with the effect of financial risk and changes in financial risk of a group of insurance contracts and a group of reinsurance contracts held.

The Company has an accounting policy choice to present all the period's insurance finance income or expenses in profit or loss or to split the amount between profit or loss and other comprehensive income (OCI). When considering the choice of presentation of insurance finance income or expenses, the company examines the assets held for that portfolio and how they are accounted for.

Currently the Company present all the period's insurance finance income or expenses in the profit or loss.

The Company does not write participating contracts and does need to reassess its accounting policy choice in respect of such policies. Comparatives are not restated.

When applying the PAA, the Company does not discount the liability for remaining coverage to reflect the time value of money and financial risk for its non-life policies with a coverage period of one year or less. For those claims that the Company expects to be paid within one year or less from the date of incurrence, the Company does not adjust future cash flows for the time value of money and the effects of financial risks. However, claims expected to take more than one year to settle are discounted applying the discount rate at the time the incurred claim is initially recognized.

On initial recognition, all transactions are recorded in the functional currency (the currency of the primary economic environment in which the group operates or transact business), which is Nigerian Naira. Transactions in foreign currencies during the year are converted into the functional currency using the exchange rate prevailing at the transaction date.

Monetary assets and liabilities at the statement of financial position date denominated in foreign currencies are translated into the functional currency using the exchange rate prevailing as at that date. The resulting foreign exchange gains and losses from the settlement of such transactions and from year-end translation are recognized on a net basis profit or loss in the year in which they arise, except for difference arising on translation of non-monetary available-for-sale financial assets, which are recognized in other comprehensive income.

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. Cash equivalents have a maturity period of less than or equal to three months.

1. Initial recognition and measurement

   Financial instruments are recognized initially when the group becomes a party to the contractual provisions of the instrument.

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

   The group classifies financial instruments or their components parts, on initial recognition as a financial asset, a financial liability, or an equity instrument in accordance with the substance of the contractual agreement. Classification depends on the purpose for which the financial instruments were obtained or incurred and takes place at initial recognition.

   Regular-way purchases and sales of financial assets are recognized on settlement date which is the date on which the group commits to purchase or sell the asset. Financial instruments are initially measured at fair value plus transaction costs for all financial assets not carried at fair value through profit and loss. These transaction costs are expensed in pr o f i t or l os s .

2. Measurement and recognition of expected credit losses

"The measurement of expected credit losses is a function of the probability of default, loss given default (i.e., the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial assets, this shall be an estimate of the exposure at a future default date; for financial guarantee contracts, the exposure includes the amount drawn down as at the reporting date, together with any additional amounts expected to be drawn down in the future by default date determined based on historical trend, the group's understanding of the specific future financing needs of the debtors, and other relevant forward-looking information.

If the group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the group measures the loss allowance at an amount equal to 12-month ECL at the current reporting date, except for assets for which simplified approach was used.

The group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and accumulated in the investment revaluation reserve and does not reduce the carrying amount of the financial asset in the statement of financial position.