AIICO Insurance Profit Growth Overshadowed as Rising Claims, Weak Market Reaction Bite
AIICO Insurance may have reported a pretax profit of ₦19.8 billion for 2025, a 24.86 per cent jump from ₦15.9 billion in 2024, but beneath the headline numbers lie troubling signals that could weigh on investor confidence.
The company’s insurance activity surged, with premiums received climbing to ₦189.2 billion from ₦156.1 billion. Yet claims paid ballooned to ₦93.5 billion, eroding much of the underwriting gains. Insurance service expenses of ₦94.5 billion and net reinsurance costs of ₦33.5 billion further pressured margins, leaving the insurance service result at just ₦9.5 billion. While this marks a turnaround from the ₦3.0 billion loss in 2024, it remains modest relative to the scale of premiums written.
More concerning is the imbalance between core insurance operations and investment reliance. Net investment income soared to ₦82.4 billion, more than eight times the insurance service result, underscoring how heavily AIICO’s profitability depends on asset revaluations and interest income rather than underwriting strength. Investment gains, including ₦24.03 billion in fair value adjustments, accounted for the bulk of earnings, raising questions about sustainability if market conditions shift.
Expenses also weighed heavily. Insurance contract costs totalled ₦59.5 billion, while other operating expenses hit ₦17.4 billion, leaving pretax profit growth far less impressive when viewed against the scale of revenues and assets.
Despite the headline profit rise, the market has not rewarded AIICO. As of mid-trading on 5 February 2026, shares were down 1.90 per cent, trading at ₦4.12. Investors appear unconvinced by the results, reflecting scepticism about the company’s ability to translate rising premiums into stronger underwriting margins.
Total assets expanded to ₦579.6 billion from ₦416.4 billion, and equity rose to ₦94.9 billion, but the balance sheet concentration highlights the same issue: profitability is being propped up by investment income rather than insurance fundamentals.
For investors, the warning signs are clear. Rising claims, heavy expense burdens, and reliance on volatile investment gains cast doubt on the sustainability of AIICO’s earnings momentum. The muted share price reaction suggests the market is already pricing in these risks, leaving the company with much to prove in 2026.
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