Universal Insurance's after-tax profit for 2025 fell sharply by nearly half to N867.9 million, down from N1.7 billion in 2024, according to its management report released on Tuesday. The non-life underwriter, whose shares have gained 46.8% this year, faced significant pressure from mounting costs across key expenditure categories.
Soaring Insurance Service Expenses
Insurance service expenses more than doubled to N8.3 billion, outpacing insurance revenue which rose by 47%. The major driver was the settlement of enormous claims in its fire insurance business. Net insurance finance expenses reached N1.6 billion, compared with a net insurance finance income of N148.8 million a year earlier.
Capital Raising and Regulatory Compliance
Like other Nigerian insurers, Universal Insurance is working to meet new minimum capital requirements under the Nigerian Insurance Industry Reform Act 2025. The law requires non-life insurers to increase core capital fivefold to N15 billion, with a deadline of August 2025. The company launched a rights issue last month to raise N3.2 billion, after shareholders approved the plan earlier in the year.
Investment Income and Other Highlights
Net investment income suffered from a 73% plunge in net fair value gain on investment properties, particularly the Rumudumu For Model Estate in Rivers State. A bright spot was the N2.4 billion recorded in net income from insurance contracts held, reversing a net expense of N413.3 million a year earlier. Profit before tax stood at N1.1 billion, down from N1.8 billion, while return on equity fell to 4.7% from 11.4%.
