Executive Summary
Linkage Assurance Plc released its unaudited financial statements for the nine months ended 30 September 2025, showcasing a resilient operational and financial performance amid a challenging macroeconomic environment. The Company reported a profit after tax (PAT) of ₦3.12 billion, representing a 25.1% year-on-year decline from ₦4.16 billion in the corresponding period of 2024. The moderation in earnings was driven by higher insurance service expenses and reduced investment gains relative to the prior year. Nevertheless, insurance revenue grew by 17.5% year-on-year to ₦19.30 billion, reflecting improved underwriting capacity, increased policy renewals, and the expansion of the Company’s corporate insurance portfolio. The insurance service result advanced by 26.7% YoY to ₦916.6 million, indicating stronger underwriting efficiency. Investment income remained a key earnings driver, contributing ₦6.11 billion to total income, though this represented a 15.2% YoY decline due to weaker fair value adjustments on financial assets. Overall, Linkage maintained strong solvency and liquidity, with total assets rising 8.3% year-to-date to ₦71.09 billion, while shareholders’ funds increased to ₦46.02 billion, up from ₦42.84 billion as at December 2024.
Financial Highlights
₦’000 9M 2025 9M 2024% Δ YoY Q3 2025 Q3 2024 % Δ YoY
Insurance Revenue 19,299,412 16,428,475 +17.5% 6,761,058 5,635,871 +20.0%
Insurance Service Expenses (12,637,990) (10,797,860) +17.0% (4,368,260) (2,989,965) +46.1%
Insurance Service Result 916,590 723,567 +26.7% 166,579 218,243 -23.7%
Total Investment Income 6,110,997 7,205,307 -15.2% 2,540,861 1,438,510 +76.6%
Other Operating Expenses (3,627,273) (3,410,834) +6.3% (1,328,405) (1,345,871) -1.3%
Profit Before Tax 3,344,066 4,381,626 -23.7% 1,399,045 130,731 +969.9%
Profit After Tax 3,117,482 4,162,545 -25.1% 1,329,093 124,195 +970.2%
Total Comprehensive Income 3,170,378 4,095,693 -22.6% 1,327,610 140,461 +845.3%
EPS (Kobo) 20.2 29.7 -32.0% 9.0 1.0 +800.0%
Operational Performance
Insurance Operations:
Linkage recorded a 17.5% increase in insurance revenue, reaching ₦19.30 billion, supported by growth across motor, fire, oil & gas, and general accident businesses. However, insurance service expenses grew in tandem by 17.0% to ₦12.64 billion, attributed to higher claim settlements and reinsurance costs. The insurance service result rose to ₦916.6 million (vs. ₦723.6 million in 2024), reflecting a stronger underwriting margin, driven by improved risk selection and prudent claims management.
Reinsurance Activities: Reinsurance expenses remained elevated at ₦7.02 billion, up 13.4% YoY, as the Company maintained robust risk transfer arrangements to manage large exposures. Nevertheless, amounts recoverable from reinsurers stood at ₦1.27 billion, cushioning the net expense from reinsurance contracts.
Investment Income: Investment income, a crucial profit driver, moderated to ₦6.11 billion (vs. ₦7.21 billion in 2024), largely due to reduced fair value gains on financial assets. Nonetheless, interest income (₦3.59 billion) and trading income (₦2.72 billion) remained strong, supported by improved yields in the money market and effective portfolio reallocation. The Company’s financial asset portfolio remains well-diversified, with over 70% of investments in government and corporate fixed-income securities, balancing return and risk exposure.
Profitability Analysis
Despite the moderation in total investment income, Linkage sustained a strong profit position. Profit before tax stood at ₦3.34 billion, down from ₦4.38 billion in 2024, reflecting a decline of 23.7%. After accounting for minimum tax charges of ₦226.6 million, profit after tax settled at ₦3.12 billion, translating to a net margin of 16.1%.
Key profitability indicators:
- Underwriting margin: Improved to 4.7% (from 4.4% in 2024).
- Return on Assets (ROA): 4.4%, compared to 6.3% in the prior year.
- Return on Equity (ROE): 7.0%, reflecting sustained capital adequacy despite lower net income.
- Earnings per share (EPS): 20.2 kobo (vs. 29.7 kobo in 2024), due to earnings moderation.
Overall, the Company maintained a solid underwriting result, underscoring disciplined cost management and sound investment strategy.
Statement of Financial Position Overview
₦’000 30 Sept 2025 31 Dec 2024 % Δ
Cash & Cash Equivalents 5,968,954 5,416,681 +10.2%
Investment Securities 51,990,620 47,632,402 +9.2%
Loans & Receivables 619,601 337,144 +83.8%
Reinsurance Contract Assets 5,667,917 5,571,208 +1.7%
Premium Receivables 876,105 948,117 -7.6%
Property, Plant & Equipment 3,228,363 3,426,201 -5.8%
Intangible Assets 27,276 33,908 -19.6%
Investment Property 340,000 340,000 —
Total Assets 71,094,510 65,677,300 +8.3%
Equity and Liabilities
- Total Equity: ₦46.02 billion (+7.4% YTD), reflecting retained earnings growth and fair value reserve gains.
- Total Liabilities: ₦25.08 billion (+9.8%), driven by higher insurance contract liabilities (+23.5%) to ₦21.47 billion, consistent with expanding policyholder obligations.
- Debt-to-Equity Ratio: Low at 0.55x, underscoring the Company’s strong solvency position.
Key Ratios and Financial Indicators
Ratio 9M 2025 9M 2024 Change
Gross Premium Growth +17.5% +12.1% +5.4pp
Underwriting Margin 4.7% 4.4% +0.3pp
Investment Yield 11.8% 14.3% -2.5pp
Claims Ratio 65.5% 65.7% -0.2pp
Combined Ratio 93.2% 94.8% -1.6pp
Return on Equity (ROE) 7.0% 9.7% -2.7pp
Solvency Margin 183% 176% +7pp
Interpretation: Linkage sustained robust underwriting fundamentals with a combined ratio below 95%, reflecting prudent risk selection and efficient claims management. Investment yields, though lower, remained competitive relative to industry averages. The Company’s solvency margin of 183% demonstrates a solid capital buffer above regulatory requirements.
Strategic Developments and Outlook
- Diversified Product Portfolio: Linkage continues to expand its retail insurance segment through digital platforms, driving premium growth and market reach.
- Investment Optimization: The firm remains focused on optimizing its fixed-income investments to enhance yield amid a rising interest rate environment.
- Digital Transformation: Ongoing deployment of technology-driven underwriting and claims automation to improve efficiency and reduce turnaround times.
- Capital Strength: The growth in contingency and fair value reserves reflects prudent earnings retention, ensuring long-term financial stability.
- Regulatory Compliance: The Company continues to comply with NAICOM’s capitalization and solvency guidelines, maintaining a strong risk-based capital position.
Strengths
- Solid capital base and high solvency ratio.
- Consistent underwriting profitability.
- Diversified investment portfolio with strong liquidity.
- Sound corporate governance and risk management practices.
Weaknesses
- Declining investment income due to market volatility.
- Rising insurance service expenses pressuring margins.
- Exposure to reinsurance dependency for large claims.
Outlook
The outlook for FY2025 remains positive. Linkage is positioned to leverage its strengthened balance sheet, solid capital adequacy, and digital transformation initiatives to sustain growth. The continued recovery in the non-life insurance sector and expected increase in infrastructure-related coverage could support further premium expansion in Q4.
The key focus areas will include enhancing underwriting profitability, reducing operational costs, and improving investment returns amid a volatile financial market environment.
Analyst View
“Linkage Assurance Plc’s Q3 2025 performance underscores operational stability, disciplined underwriting, and strong investment management. Although earnings moderated year-on-year, the Company’s improved asset base and robust capital position set the stage for steady long-term growth and profitability recovery.”
Conclusion
Linkage Assurance Plc delivered a solid nine-month performance characterized by strong premium growth, positive underwriting results, and sound financial stability. Despite lower investment income and higher insurance expenses, the Company remains financially resilient with expanding assets and a firm capital base. Going forward, management’s focus on risk optimization, digital innovation, and efficient claims management should continue to drive operational excellence and support sustainable shareholder value creation in FY2025 and beyond.
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