Mutual Benefits 9M profit falls 9% to ₦13.9B despite 7% revenue growth
Mutual Benefits Assurance posted nine-month pre-tax profit of ₦13.89 billion, down 9.1% from ₦15.28 billion a year earlier, even as insurance revenue grew 7.1% to ₦65.16 billion. The squeeze came from insurance service expenses jumping 24% to ₦60.71 billion—outpacing revenue growth—and net investment income falling 14% to ₦9.91 billion on ₦793 million foreign exchange losses versus gains last year.
Motor insurance drove revenue at ₦20.7 billion (32% of total, up 15%), while aviation insurance collapsed to ₦130 million from ₦1.5 billion. Reinsurance improved sharply, swinging to ₦744 million net income from a ₦2.53 billion net expense. The oil & gas subsidiary contributed ~₦1.6 billion in other income. Profit after tax dropped 14.1% to ₦12.27 billion; EPS fell to 57 kobo from 69 kobo.
Q3 told a better story: pre-tax profit more than doubled to ₦7.54 billion on 16.5% revenue growth and lower service expenses. Total assets rose 18% to ₦207.9 billion, equity up 24% to ₦86.7 billion after an ₦8 billion capital injection for recapitalisation. Operating cash flow turned negative (₦4.3 billion outflow), though cash reserves held at ₦40.1 billion.
Shares closed at ₦3.09 (+1.6% daily) but down 0.3% year-to-date. Market cap: ~₦62 billion.
With expenses growing faster than premiums and FX volatility hitting investments, can Mutual Benefits sustain margin recovery into 2025, or will recapitalisation pressure persist?