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.

Mansard Insurance Plc H1/Q2 Result– Valuation Catching Up with Earnings Normalization

Shared on31 Jul 25

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