Axa Mansard Insurance Plc has reported a pre-tax profit of N6.099 billion for the nine-month period ended September 30, 2025, representing a 82.30% decline compared to N34.480 billion recorded in the corresponding period of 2024.

According to the company’s unaudited financial statements, profit after tax (PAT) also dropped sharply by 80.08% year-on-year to N6.005 billion from N30.158 billion in the same period of 2024.

This occurred despite a commendable performance in insurance operations where revenue grew by 22.7% to N120.527 billion, up from N98.244 billion.

Axa Mansard’s insurance service result fell by 17.21% year-on-year to N10.341 billion compared to N12.429 billion in 9M 2024.

Insurance revenue rose significantly to N120.528 billion, up 22.7% year-on-year from N87.845 billion in the prior period. However, this gain was largely eroded by higher insurance service expenses, which surged to N84.815 billion (+43.67%), even as net expense from reinsurance contracts moderated by -5.05% YoY to N25.37 billion, down from N26.72 billion in nine months of 2024.

The combined impact of these higher costs compressed the margin of insurance operations despite top-line growth.

Axa Mansard recorded a notable drop in total investment return, which declined by 73.09% to N8.985 billion from N33.366 billion in 9M 2024.

The company’s interest revenue under the effective interest method improved to N8.946 billion (+43.0%), reflecting better yields from fixed-income assets. However, a sharp fall in other investment revenue from N27.694 billion in 9M 2024 to just N373 million in 2025 heavily dragged down overall investment returns.

This mirrors the broad market volatility in the fixed-income segment during the period, which impacted returns on financial assets.

Axa Mansard Insurance Plc posted a solid 22.7% year-on-year increase in insurance revenue to N120.53 billion in the nine months ended September 30, 2025, reflecting improved underwriting performance and business expansion across its retail and corporate segments. However, the growth was overshadowed by a steep 43.67% surge in insurance service expenses to N84.82 billion, largely due to higher claims payouts and operational costs pressures.

While the company benefited from reduced reinsurance outflows — with net expenses from reinsurance contracts declining by 5.05% to N25.37 billion — the overall insurance service result fell 17.21% to N10.34 billion, indicating cost escalation might have eroded the gains from revenue growth and more efficient reinsurance management, leaving the underwriting margin under pressure in the period under review.

The most significant drag on Axa Mansard’s performance came from its investment portfolio, where returns dropped sharply by 73.07% to N8.99 billion. The underwriter’s investment performance suffered a heavy blow compared to the strong earnings seen in 2024.

Despite this, the company recorded a 37.54% growth in other income to N4.46 billion, reflecting improved non-core revenue streams such as fee income and fair value gains on non-investment assets. Nevertheless, these gains were insufficient to cushion the impact of the slump in investment returns, leading to a significant contraction in overall profitability.

The combination of higher expenses and reduced investment income pushed profit before tax (PBT) down by 82.3% to N6.10 billion, while profit after tax (PAT) plunged 80.08% to N6.01 billion. Consequently, earnings per share dropped to 63 kobo compared with N3.27 in corresponding period of 2024, representing an 80.73% year-on-year decline.

Despite the sharp fall in profitability, the company’s balance sheet remained resilient. Total assets expanded by 13.93% to N220.58 billion from N193.608 billion in nine months.

When compared to liabilities in the nine months of 2025, total liabilities increased by 12.35% to N158.11 billion, up from N140.73 billion in the nine-month period. Notably, shareholders’ funds rose by a significant 19.55% to N56.32 billion, underscoring continued capital adequacy and balance sheet strength.

The 9M 2025 performance demonstrates resilience in revenue generation but also highlights significant profitability challenges that could impact on equity price in the short term.

Going forward, rebalancing investment exposure and tightening expense controls will be crucial in reversing the profit decline and sustaining shareholder value in the coming quarters.

Source: Nairametrics