Lasaco Assurance Projects First Annual Loss in Over a Decade
Lasaco Assurance, a prominent player in the general insurance sector, is set to record its first annual loss in 13 years for the 2025 financial year, following a half-year loss of N731.5 million reported in the first half of the previous year.
Mid-Year Financial Performance Reflects Industry Changes
In its most recent corporate report, released on Friday, Lasaco Assurance revealed a year-on-year gain of N384.9 million for the year ending June. This comes as the Nigerian insurance industry approaches the recapitalization deadline, which is looming this month.
Cost Reductions Drive Profitability, Not Revenue Growth
The shift back to profitability can be attributed mainly to significant cost reductions rather than any increases in revenue. Notably, the company’s core insurance income fell by 3.2% from the first half of 2025, dropping to N16.3 billion. This decline was driven by a considerable decrease in cash available from general business insurance policies.
Strategic Cuts Enhance Insurance Services Performance
Lasaco Assurance implemented a 17% reduction in insurance service costs and an 11.4% decrease in net costs associated with reinsurance contracts. These strategic moves were vital in boosting the performance of Insurance Services, climbing to N3.1 billion from N1.1 billion in the previous year.
Investment Income Declines Amid Market Challenges
On the investment front, Lasaco suffered a setback, with performance decreasing by 13.4% to N1.6 billion. This slump was largely due to diminished interest income, as calculated using the effective interest method, encompassing declines in income from both fixed deposits and bonds during the reporting period.
Foreign Exchange Fluctuations Impact Overall Results
The financial services company recorded a net foreign exchange loss of N67.9 million, contrasting sharply with a profit of N58.1 million during the same period last year. This unfavorable development further weighed down the overall net investment results. Additionally, other operating profits plummeted from N246.1 million to N33.3 million, while operating expenses saw an increase of 9.2%, escalating from N3.8 billion to N4.2 billion.
Profit Margins Under Pressure Despite Recalibrated Performance
The profit before tax stood at N436.2 million, a decrease from N518.1 million in the corresponding period last year, while profit after tax was recorded at N384.9 million, a notable improvement from the previous year’s net loss of N731.5 million.
Recapitalization Efforts and Market Reforms Moving Forward
Nigeria’s ongoing insurance sector recapitalization mandates life insurance providers to raise their minimum paid-up capital from NOK 2 billion to NOK 10 billion, while non-life insurance firms must increase theirs from NOK 3 billion to NOK 15 billion. The threshold for general insurance companies has been elevated from N5 billion to N25 billion.
Through a recently executed rights issue, Lasaco announced it had successfully raised NOK 19.3 billion, confirming compliance with the capital requirements set by the National Insurance Commission and the Securities and Exchange Commission. Furthermore, the NGX Insurance Index—a key measure of Nigeria’s most significant insurance stocks—has risen by 23.8% since President Bola Tinubu signed the Nigeria Insurance Industrial Reform Act on August 4, 2025.
