AXA Mansard’s Profit Drops 51.74% on Reduction in FX Gains

AXA Mansard’s first quarter profit has taken a hit from a reduction in foreign exchange (FX) gains as expenses are growing faster than revenue growth, which fans the flame of deteriorating margin.

For the first three months through March 2025, AXA Mansard’s net income fell by 51.74 percent to N6.21 billion from N12.87 billion as at March 2024.

The drop at the bottom line (profit) was due to a 74.63 percent reduction in foreign exchange gains that used to be a major driver of earnings when the local currency Naira was unstable and on a free fall.

However, liquidity in the foreign exchange market has improved, especially in the first quarter months of the year.

Revenue was up 26.67 percent to N40.33 billion in the period under review from N31.84 billion the previous year.

Analysis by MoneyCentral shows insurance service expenses grew by 46.51 percent, which is lower than expansion in revenue as claims expenses are soaring on the back of inflationary pressures.

There has been a slowdown in growth for insurance products due to weak consumer confidence in the service delivery of sector players.

Lack of trust for the claims payment process by consumers combined with high unemployment undermines penetration because it is difficult for people to voluntarily take up a cover in the country where over 50 percent of a population of 200 million live below the World Bank’s daily $1.98.

The insurance sector in Nigeria is marked by low penetration rates, currently around 1%, which starkly contrasts with the global average of 7%, according to data from Insurance Market Research in Nigeria | Novatia Consulting.

Stakeholders in the industry are of the view that there is a need to leverage technology to mitigate management risk and that Nigerians need to be educated on the usefulness of insurance cover.

“To drive penetration, the insurance sector need to leverage on technology for risk management in the country. To achieve sustainable growth, insurers should be seen as agents of change and they should pursue or support projects that are pro climate,” said Oyekanmi Aboyeji, Senior Manager and Team Lead, Transfer Pricing Audit Division of Federal Inland Revenue Service, International Tax Department