Prestige Assurance Plc has released its unaudited full-year 2025 financial results, showing a sharp deterioration in profitability despite solid growth in premiums and insurance revenue.
Profit before tax (PBT) fell by 76% to N741.3 million, from N3.09 billion in 2024, as higher reinsurance costs, weaker investment income, rising operating expenses, and foreign exchange losses more than offset gains from underwriting volumes.
Profit after tax declined by 81% year-on-year to N609.3 million, while earnings per share dropped sharply to 4.60 kobo from 24.42 kobo, reflecting significant pressure on shareholder returns.
The results highlight a growing gap between top-line growth and bottom-line performance, underscoring the impact of cost pressures and adverse market conditions on the insurer’s earnings.
Revenue growth fails to translate into profits
Headline revenue indicators remained strong. Gross premium written increased by 14% to N25.7 billion, while insurance revenue rose by 28% to N25.16 billion, supported by improved policy volumes, pricing adjustments, and stronger underwriting activity.
However, these gains failed to flow through to profitability. Insurance service expenses climbed to N21.24 billion, while net reinsurance costs surged sharply.
The net expense from reinsurance contracts swung to a cost of N4.69 billion, compared with a N586 million income in 2024. This reversal alone wiped out most of the underwriting gains recorded during the year.
As a result, the insurance service result deteriorated to a loss of N762.3 million, from a profit of N127.7 million in the prior year, highlighting the growing drag from reinsurance arrangements and claims-related adjustments.
Key financial highlights (FY 2025 vs FY 2024)
Gross Premium Written: N25.70 billion (+14% YoY)
Insurance Revenue: N25.16 billion (+28% YoY)
Insurance Service Expenses: N21.24 billion (+6% YoY)
Net Reinsurance Expense: N4.69 billion (from N586 million income)
Insurance Service Result: N762.3 million loss (from N127.7 million profit)
Total Investment Income: N3.09 billion (-33% YoY)
Profit Before Tax: N741.3 million (-76% YoY)
Profit After Tax: N609.3 million (-81% YoY)
Net Assets / Equity: N20.25 billion (+4% YoY)
Total Assets: N37.35 billion (-2% YoY)
Total Liabilities: N17.1 billion (-8% YoY)
More insights: Reinsurance and FX hit earnings
Prestige Assurance recorded a strong improvement in insurance service result before reinsurance, which jumped by 956% to N3.92 billion, indicating that core underwriting performance improved materially before risk transfer costs were applied.
However, investment income declined by 33% to N3.09 billion, driven mainly by a sharp deterioration in foreign exchange income. FX income swung to a loss of N283.8 million, from a gain of N1.89 billion in 2024.
Although interest income rose by 13% to N1.94 billion, lower overall portfolio yields and reduced dividend and other investment income weighed on total investment returns.
Reinsurance costs surged, with ceded premiums nearly doubling to N15.01 billion, alongside higher reinsurance fees, commissions, and changes in reinsurance liabilities.
Operating efficiency also weakened, as other management expenses rose by 34% to N2.12 billion, further compressing margins.
Balance sheet remains relatively stable
Despite the sharp fall in earnings, Prestige Assurance’s balance sheet remained relatively stable in 2025.
Total assets eased slightly to N37.35 billion from N38.00 billion, while net assets increased by 4% to N20.25 billion, supported by retained earnings and fair value gains on investment property and financial assets.
Total liabilities declined by about 8% to N17.1 billion, reflecting lower insurance contract liabilities and reduced trade payables.
Equity strengthened modestly, supported by stable share capital, improved revenue reserves, and resilient revaluation balances, helping to preserve capital adequacy despite weaker profitability.
Bottom line
Prestige Assurance delivered strong premium and revenue growth in 2025, but rising reinsurance costs, weaker investment income, FX losses, and higher operating expenses severely eroded profitability.
The results suggest that while the insurer’s core underwriting engine is improving, earnings sustainability will depend on better cost control, improved reinsurance efficiency, and a recovery in investment and foreign exchange income.
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Emmanuel Bassey is a Financial Expert that has worked in the Banking and Finance Industry for over 15+ years across different banks in Nigeria
