Last Update31 Jul 25
WaneInvestmentHouse has decreased revenue growth from 12.4% to 5.2% and decreased shares outstanding growth rate from 0.1% to 0.0%.
AXA Mansard reported solid balance sheet growth and resilience in its core insurance and investment business for H1 2025. However, a significant decline in profit before tax (-73% YoY) reflects a normalization from the one-off investment income spike in H1 2024. Despite reduced profitability, the company remains fundamentally sound with healthy capital buffers and improved insurance service results. We assign a HOLD rating while monitoring earnings quality and capital deployment strategy.
Key Strengths:
✅ Improved Insurance Fundamentals
- Insurance revenue rose 24% YoY to ₦81.15 billion, supported by strong growth in policyholder acquisition and retention.
- Insurance service result remained stable at ₦9.2 billion, indicating underwriting resilience despite rising reinsurance costs.
✅ Robust Investment Portfolio Growth
- Fair value through OCI investments grew by 16% to ₦110.8 billion, showing strategic positioning in stable yield assets.
- Combined investment return of ₦7.0 billion, though down from H1 2024, remains healthy in a normalized interest rate environment.
✅ Balance Sheet Strengthening
- Total assets increased by 21% YTD to ₦234 billion, driven by increases in trade receivables, reinsurance assets, and investment securities.
- Shareholders’ equity rose by 21% YTD to ₦57 billion, reflecting earnings retention and positive fair value reserve movement.
✅ Return to Positive Comprehensive Income
- Total comprehensive income of ₦9.86 billion (vs. ₦21.5 billion in H1 2024) signals improved fair value adjustments and stabilized operations.
Key Weaknesses:
⚠️ Earnings Normalization After One-off Spike
- Profit before tax declined sharply by 73% YoY to ₦7.73 billion from ₦28.57 billion in H1 2024, largely due to non-repeat of ₦23.8 billion investment gains last year.
⚠️ Rising Claims and Expense Pressures
- Insurance service expenses surged 50% YoY, significantly outpacing revenue growth and pressuring underwriting margins.
- Administrative and employee benefit costs also increased, indicating inflationary and operational strain.
⚠️ Diminished Investment Alpha
- While still positive, investment return dropped 74% YoY, suggesting reduced market opportunities and tighter yield conditions post-2024 rally.
Valuation and Outlook:
While AXA Mansard’s earnings have retracted from 2024’s elevated levels, its core business remains intact. Insurance revenue continues to grow, capital adequacy is strong, and investment performance, though normalized, is still positive.
We believe the current share price likely reflects a more modest earnings trajectory going forward. Investors should watch:
- Evolution of underwriting margins
- Future asset allocation strategy
- Capital utilization and potential dividend policy
📌 Final Verdict: HOLD
AXA Mansard offers quality exposure to Nigeria’s insurance sector, backed by strong solvency and diversified income. However, investors should wait for profitability to stabilize before accumulating further.
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Disclaimer
The user WaneInvestmentHouse holds no position in NGSE:MANSARD. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.