Lasaco Assurance Swings to Profit on Cost Efficiency, Nears Recapitalization Deadline

Composite insurance underwriter Lasaco Assurance has successfully reversed a significant half-year loss, posting a profit of N384.9 million for the period ending June. This marks a turnaround from the N731.5 million loss recorded in the same period last year, which contributed to its first annual loss in thirteen years. The insurer's return to profitability was primarily attributed to stringent cost-cutting measures rather than an increase in revenue. Insurance revenue, its main income stream, saw a slight decrease of 3.2 percent to N16.3 billion, impacted by a drop in income from its general business insurance contracts. Lasaco Insurance significantly reduced insurance service expenses by 17 percent and net expenses from reinsurance contracts by 11.4 percent. These efficiencies boosted insurance service results to N3.1 billion from N1.1 billion year-on-year. However, investment results were less robust, declining 13.4 percent to N1.6 billion due to lower interest revenue from fixed deposits and bonds. The company also incurred a net foreign exchange loss of N67.9 million, contrasting with a gain in the prior year. Other operating income also saw a sharp drop. Despite a 9.2 percent increase in operating expenses, the company achieved a pre-tax profit of N436.2 million and a post-tax profit of N384.9 million. Lasaco Assurance is also navigating Nigeria's insurance industry recapitalization, which requires non-life insurers to increase their minimum paid-up capital to N15 billion and composite firms to N25 billion by the end of this month. The company recently raised N19.3 billion through a rights issue, which has reportedly passed capital verification with the National Insurance Commission.