African Alliance Insurance Plc premiums have fallen while rising claims expenses continues to undermine profit, an unimpressive performance amid owners who are working assiduously hard to raise capital so as to meet regulatory recapitalisation requirements.
There are growing concerns that a persistent fall in earnings could tip the company into technical insolvency, which will make it practically difficult to meet obligations to policyholders.
The third-quarter (Q3) financial statement of African Alliance for the year 2025 showed it posted N5.52 billion insurance revenue, which is 46.14 percent lower than 2024’s N10.25 billion.
While the slump at the top line (revenue) is not inimical to the going concerns of the entity, it has left the insurer vulnerable to operational inefficiencies.
Profit after tax (PAT) reduced by 51.73 percent to N1.53 billion in September 2025 from N3.17 billion as at September 2024.
Perhaps more worrisome is receding operating expenses which surged by 338.64 percent to N4.36 billion as at September 2025.
Of course, the insurer has been paying out more in claims than it is receiving in premiums as the combined ratio is under pressure, which also calls for a cost control policy.
Analysts and stakeholders have called on the owners of the company to introduce innovative products to the market as they think such a strategy will help strengthen sales.
The insurer has N37.22 billion in accumulated losses as at September 2025, which is not deleterious to the balance sheet as total shareholders’ fund stood at N5.52 billion.
To strengthen its capital base regulatory recapitalisation requirements, Africa Alliance is exploring a mix of convertible debt and asset sales.
The company’s board was authorised to raise up to N12bn through a combination of private placement, rights issue, public offer, convertible subordinated debt notes, asset sales and other structures permitted by law.
Shareholders have directed the directors to raise up to N12 billion through a combination of private placement, rights issue, public offer, convertible subordinated debt notes, asset sales and other structures permitted by law.
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