LASACO Assurance slips into loss as costs surge, but shareholders’ funds remain strong

LASACO Assurance Plc reported a loss of N3.072 billion in full-year 2025, from a profit of N1.522 billion in 2024, as rising costs outpaced revenue growth, the insurer’s 2025 financial statements show.

The loss was driven mainly by a sharp increase in insurance service expenses and reinsurance costs. While revenue grew by 31 percent to N29.98 billion in 2025, from N22.819 billion in 2024, insurance service expenses rose by 21 percent to N25.239 billion, and net expenses from reinsurance contracts held more than doubled to N6.814 billion. The combined effect of higher claims, policy servicing costs, and reinsurance outlays wiped out the revenue gains, pushing the company into the red.

Despite the loss, shareholders’ funds jumped 75 percent to N20.996 billion in 2025, from N12.015 billion in 2024. Shareholders’ funds, also called owner’s equity, represent the residual interest of shareholders in a company’s assets after deducting liabilities. It consists of share capital, retained earnings, and reserves, reflecting the net value of the company at a point in time, according to Amour Accountants, a firm specialising in accounting processes. The increase in shareholders’ funds was largely supported by asset growth and reserve adjustments.

LASACO’s total assets grew to N40.240 billion, from N31.749 billion in 2024, showing the insurer maintains a positive net worth and a strong balance sheet.

On the cash front, net cash absorbed from operating activities was negative, reflecting the impact of higher claims and expenses. Net cash outflow from financing activities stood at N10.823 billion, indicating the company paid out more to shareholders and financiers than it received. Meanwhile, net cash outflow from investing activities rose to N6.126 billion, up from N4.239 billion, as LASACO invested more in long-term assets than it realised from disposals. Nevertheless, cash and cash equivalents ended the year at N14.681 billion, up from N10.345 billion in 2024, signalling sufficient liquidity to meet short-term obligations.

READ ALSO: Nigeria’s insurance penetration still below 1%, offers both challenge and opportunity- Gbadegesin, MD, Goxi

LASACO Assurance Plc is one of Nigeria’s fastest-growing insurers. Incorporated on December 20, 1979, licensed on July 7, 1980, and commencing full operations on August 1, 1980, the company offers a wide range of products including motor insurance, fire and perils, burglary and house-breaking, and public liability. The firm continues to grow despite challenges from rising costs, reflecting the increasing awareness and uptake of insurance products in the country.

Nigeria’s insurance sector

Nigeria’s insurance industry is regulated by the National Insurance Commission (NAICOM). The sector comprises mainly life insurance companies (provide policies covering life, retirement, and long-term savings) and non-life insurance companies (covering risks such as motor, fire, marine, liability, and property). LASACO is a life insurance company.

Nigeria’s insurance penetration remains low, around 0.5 percent of the gross domestic product (GDP), far below the global average of 3 percent–4 percent.

The Nigerian Insurance Industry Reform Act 2025 (NIIRA 2025) was signed into law on August 5, 2025, by President Bola Ahmed Tinubu. Agusto & Co. anticipates the injection of N600 billion in additional capital as insurers commence activities to comply with the increase in minimum capital requirements in the Act.

According to Agusto & Co.’s estimates for the financial year ended December 31, 2024, the industry’s insurance revenue crossed the N1 trillion mark to N1.1 trillion, a 32.7 percent year-on-year increase.

Major growth drivers include aggressive marketing activities, an upward review of premiums to reflect the prevailing inflationary pressures and the impact of the steep naira depreciation on the premium from foreign currency-denominated policies. “In the near term, we believe the insurance revenue would maintain the upward trajectory spurred by the uptick in compulsory insurance policies enforcement, increasing technology adoption in product distribution, the entrance of new players and recapitalisation activities,” the firm said.

“The 2024 performance of the insurance industry revealed a complex landscape marked by significant growth in certain areas alongside persistent and emerging challenges. “While specific data for the entire year of 2024 is still being consolidated, the trends and available reports offer valuable insights. Available data up to the end of the third quarter of 2024 indicated robust growth in gross premiums,” said Chairman of the Nigerian Insurance Association, Mr Kunle Ahmed.