Yemisi Izuora
Universal Insurance Plc, has secured Agusto & Co’s “Bbb-” long-term rating with a stable outlook.
The rating cited the company’s long operating history, improved profitability and sound underwriting performance.
The rating agency in a statement on Monday, said the insurer’s strong solvency position, with a margin of 184.9 per cent, well above its minimum threshold of 100 per cent, underscored its capacity to support underwriting activities.
Agusto & Co. noted that Universal Insurance recorded strong growth driven by initiatives to deepen relationships with customers and insurance brokers, as well as improvements in customer experience through digital platforms.
According to the agency, the company’s shareholders’ funds stood at N13.2 billion as at Dec. 31, 2024, representing a 27 per cent year-on-year increase, supported by full profit retention.
It added that insurance revenue rose sharply to N13.8 billion, a 71.9 per cent increase from the previous year.
It said, “The report stated that the company’s reinsurance arrangements were tested in 2024 following a spike in claims from the oil and gas segment.
“Gross claims more than doubled to N3.6 billion, but reinsurance recoveries reduced net claims by 48 per cent to N2.3 billion.
“As a result, the average loss ratio improved by 220 basis points to 14.7 per cent, significantly better than the industry average of 33.1 per cent.”
The agency also disclosed that Universal Insurance’s investment portfolio grew by 14.5 per cent to N10.5 billion at the end of 2024.
Operating cash flow strengthened significantly in 2024, rising by 98.4 per cent to N3.1 billion, supported by higher premium collections and reinsurance recoveries.
It said this covered incurred claims liabilities 1.5 times, outperforming the industry average, although liquidity metrics remained broadly stable due to increased estimated claims liabilities.
Agusto & Co. said improved underwriting performance and favourable portfolio valuations drove profit before tax to N2.1 billion, up from N526.7 million in 2023.
Pre-tax return on assets and equity improved to 11.4 per cent and 17.4 per cent, respectively, though both remained below industry averages.
The Agency noted that while claims payments in early 2025 moderated performance, expected reinsurance recoveries were projected to support a rebound in profitability for the full year.
Based on these factors, Agusto & Co. assigned a stable outlook, reflecting expectations that improved underwriting discipline, successful capital raising and enhanced digital capabilities would support the company’s financial profile over the medium term.
Commenting, Dr Jeff Duru, Managing Director of Universal Insurance Plc, said, “We acknowledge the recent “Bbb-” credit rating assigned to our company.
“It is indeed a reflection of hard work and the current macroeconomic environment and the ongoing investments we are making to support long-term growth and resilience.
“We are fully focused on strengthening our balance sheet, improving operating efficiency, and executing initiatives that we believe will enhance the metrics of our credit standing over time.
“Management remains committed to maintaining transparent communication with our stakeholders and to delivering sustainable value for shareholders including customers and employees,” Duru noted.