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From N2.35bn To N842.67m… Why Sovereign Trust Insurance Profit Crashed By 64%

February 12, 2026
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From N2.35bn to N842.67m... Why Sovereign Trust Insurance Profit Crashed By 64%

Over N44.62 billion was generated as revenue by Sovereign Trust Insurance between January and December 2025, surpassing the N40.44 billion turnover recorded in 2024, representing a 10 percent increase.

According to the company’s unaudited consolidated financial statements for the period ended December 31, 2025, the company’s expenses outgrow the turnover, as the former rose by 12 percent.

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Prime Business Africa gathered that Sovereign Trust incurred N21,91 billion as insurance service expenses between the first quarter (Q1) and the fourth quarter (Q4) of last year, compared to the N19,57 billion expense reported in 2024.

Also, the insurer’s net expenses from reinsurance contracts grew by 30 percent to N18.52 billion in 2025, exceeding the N14.22 billion incurred the year before.

As a result, Sovereign Trust’s insurance service result, also known as underwriting profit, dropped by 37 percent, from the N6.64 billion recorded in 2024 to N4.18 billion in 2025.

Also, the insurer’s investment income declined marginally by 3.68 percent to N1.53 billion between Q1 and Q4 of last year, falling below the N1.59 billion earned from the segment in 2024.

During the period under review, Sovereign Trust failed to record net foreign exchange income, but was able to reverse the N854.40 million net foreign exchange loss suffered in 2024.

However, the company’s earnings depleted further with a 24.11 percent increase in other operating expenses, which increased from N3.93 billion to N4.88 billion.

But with the insurer recording zero finance expenses from insurance contracts issued in 2025, it was able to overturn the N1.24 billion finance expenses from insurance contracts issued in 2024.

Nevertheless, recording zero finance income from reinsurance contracts in 2025 did further damage to the company’s bottom line, indicating that Sovereign Trust failed to replicate the N352,72 million finance income earned the year before.

This led to Sovereign Trust suffering a 61 percent decrease in its profit before tax (PBT), which plunged from N2.64 billion in 2024 to N1.02 billion in 2025.

The decline in the insurer’s bottom line would have been more if not for a 38.12 percent decrease in its income tax, as it fell to N182.43 million last year, from the N294.84 million taxes paid in 2024.

Consequently, Sovereign Trust’s profit after tax (PAT) fell from N2.35 billion to N842.67 million, indicating a 64 percent year-on-year decline.

For press releases, tip-offs, and corporate information, call 08149575257 (hotline), email: editor@primebusiness.africa and publisher@primebusiness.africa

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