Mounting costs across key expenditure categories set Universal Insurance up for a sharp slide in profit for last year, its management report released on Tuesday has shown.

The non-life underwriter, whose shares are up 46.8 per cent this year, reported N867.9 million in post-tax period for the period, nearly a half weaker than the level reached in 2024, when N1.7 billion was logged.

Insurance service expenses were the major pressure points as they not only more than doubled to N8.3 billion, but also crowded out insurance revenue, which had risen by 47 per cent.

That was largely driven by the settlement of enormous claims in its fire insurance business.

Like other Nigerian insurers, Universal Insurance is on track to buck up equity capital to meet the new minimum requirements laid out by the Nigerian Insurance Industry Reform Act 2025 for insurers.

The new rule is ordering underwriters operating life insurance business and their non-life insurance counterparts to scale up core capital fivefold to N10 billion and N15 billion respectively.

Insurers have been set a deadline of this August to fulfil the requirements as part of a strategic push by the Tinubu’s administration to position the broader financial services sector as the pivot of growth for an economy he expects to touch $1 trillion in valuation come 2030.

Universal Insurance launched a rights issue last month, hoping to source N3.2 billion after shareholders greenlighted the plan earlier in the year.

In the period under review, net insurance finance expenses came to N1.6 billion, whereas the contrary was the case a year earlier when a net insurance finance income of N148.8 million was posted.

ALSO READ: Cornerstone Insurance’s 2025’s profit drops more than half as FX gains dry up

Net investment income took a hit from a 73 per cent plunge in net fair value gain on investment properties, especially the company’s Rumudumu For Model Estate in Rivers State.

Perhaps the single biggest bright spot in the results was the N2.4 billion recorded in net income insurance contracts held, swinging back to a positive after report a net expense insurance contract held of N413.3 million a year earlier.

Profit before tax stood at N1.1 billion, compared to N1.8 billion in the previous year, while return on equity fell to 4.7 per cent from 11.4 per cent.

High operating costs cause Universal Insurance profit to drop by 49.2%

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