African Alliance Insurance Plc reported a profit after tax of N3.87 billion for the 2025 financial year, despite recording a N34.18 billion insurance service deficit, as investment income rose sharply during the period.
The insurer’s audited financial statements for the year ended December 31, 2025, showed that profit after tax increased by 21.9 per cent from N3.17 billion in 2024, while profit before tax rose 73.8 per cent to N5.52 billion from N3.18 billion.
Investment income surged to N41.28 billion in 2025 from N2.93 billion in the preceding year, providing the major earnings contribution amid a significant deterioration in the company’s insurance service result.
The company’s insurance service result swung to a deficit of N34.18 billion from a surplus of N9.16 billion in 2024, reflecting the pressure from insurance service expenses, which climbed to N35.09 billion from N993.96 million.
Insurance revenue declined sharply by 91.1 per cent to N911.83 million from N10.25 billion in the previous year, indicating a substantial contraction in revenue generated from insurance contracts.
Despite the decline in insurance revenue and the insurance service deficit, the increase in investment income supported the company’s overall profitability. Net insurance and investment result stood at N7.10 billion, compared with N4.53 billion in 2024.
Other expenses declined to N1.58 billion from N1.72 billion, while income tax expenses increased to N1.66 billion from N6.12 million in the preceding year.
African Alliance Insurance’s total assets fell by 44.4 per cent to N27.52 billion as of December 31, 2025, from N49.50 billion a year earlier.
The contraction was largely reflected in financial assets, which declined following the disposal of the company’s investment in PAL Pension Limited. The financial statements recorded N29.75 billion in disposals relating to the investment during the year.
Cash and cash equivalents, however, rose to N8.73 billion from N748.98 million in 2024, while total liabilities declined by 58.4 per cent to N18.41 billion from N44.26 billion.
Insurance and investment contract liabilities fell to N12.76 billion from N40.26 billion, while total equity increased by 73.7 per cent to N9.11 billion from N5.24 billion.
The company’s retained losses narrowed to N33.64 billion from N36.97 billion, supported by the profit recorded during the year.
The insurer recorded a net cash outflow of N29.41 billion from operating activities in 2025, compared with an outflow of N3.58 billion in 2024. The cash flow statement attributed significant pressure to claims paid, which rose to N31.42 billion from N5.10 billion.
Investing activities generated a net cash inflow of N37.39 billion, compared with N3.44 billion in the previous year. The statement included N36 billion in proceeds from the sale of PAL.
Consequently, cash and cash equivalents increased by N7.98 billion during the year to N8.73 billion at the reporting date.
The company’s solvency margin schedule reported a deficit of N1.51 billion, with a deficit of N3.51 billion against the stated minimum capital requirement of N2 billion.
The financial statements also reported gross and net solvency ratios of negative 75 per cent and negative 175 per cent, respectively