Lagos: Agusto and Co. has assigned a ‘Bbb-‘ long-term rating with a stable outlook to Universal Insurance Plc, citing the company’s long operating history, improved profitability, and sound underwriting performance. The rating agency emphasized the insurer’s strong solvency position, with a margin of 184.9 percent, which is well above the minimum threshold of 100 percent, underscoring its capacity to support underwriting activities.
According to News Agency of Nigeria, 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. The company’s shareholders’ funds stood at N13.2 billion as of December 31, 2024, representing a 27 percent year-on-year increase, supported by full profit retention. Insurance revenue rose sharply to N13.8 billion, reflecting a 71.9 percent increase from the previous year.
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 percent to N2.3 billion. Consequently, the average loss ratio improved by 220 basis points to 14.7 percent, significantly better than the industry average of 33.1 percent.
The agency also disclosed that Universal Insurance’s investment portfolio grew by 14.5 percent to N10.5 billion at the end of 2024. Operating cash flow strengthened significantly in 2024, rising by 98.4 percent to N3.1 billion, supported by higher premium collections and reinsurance recoveries. 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 and Co. noted that improved underwriting performance and favorable 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 percent and 17.4 percent, respectively, though both remained below industry averages. While claims payments in early 2025 moderated performance, expected reinsurance recoveries are projected to support a rebound in profitability for the full year.
Based on these factors, Agusto and 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 on the rating, Dr. Jeff Duru, Managing Director of Universal Insurance Plc, expressed acknowledgment of the ‘Bbb-‘ credit rating, stating that it reflects the hard work and current macroeconomic environment, as well as the ongoing investments aimed at supporting long-term growth and resilience. He emphasized the company’s focus on strengthening its balance sheet, improving operating efficiency, and executing initiatives to enhance credit standing metrics over time. Dr. Duru affirmed the management’s commitment to maintaining transparent communication with stakeholders and delivering sustainable value for shareholders, including customers and employees.