Cornerstone Insurance's 2025 profit falls sharply as forex gains vanish

Cornerstone Insurance’s profit for last year dropped by over half compared to 2024. This decline was caused by the end of a major income boost that the naira devaluation gave to banks and insurers with foreign currency assets two years ago.

The latest audited earnings report shows that post-tax profit fell by 54.6 per cent. The net gain from foreign exchange, which had been a major factor in profit growth in 2024, changed from N30.8 billion to a loss of -N6.1 billion.

Nigeria’s recent currency reforms, especially the naira devaluation aimed at attracting foreign investors, led to a 70 per cent drop in the value of the naira against the dollar from 2024 to 2025.

This made the exchange rate for the naira much higher against the dollar, benefiting Nigerian banks and insurers with foreign currency assets. These institutions saw significant gains after converting these assets back to naira.

Insurance revenue for Cornerstone Insurance rose to N51.7 billion during the review period, an increase of 33.6 per cent. This growth came mainly from higher income in its non-life business.

Insurance service expenses decreased by 9 per cent to N23.2 billion, which improved the company’s insurance service results. Profit before tax was reported at N8.5 billion, down from N28.2 billion.

This month, Cornerstone Insurance announced plans to separate its general insurance and life insurance businesses into independent companies. This move aligns with the Nigeria Insurance Industry Reform Act 2025, which ended the combined insurance business structure in the country.

“Under the terms of the unbundling/separation, the eligible assets and existing policies of the general insurance business will be transferred to FIN Insurance Company Limited (“FIN Insurance”), an existing subsidiary of Cornerstone Insurance,” the company explained.

“The eligible assets and policies of Cornerstone Insurance’s life business will be transferred to Cornerstone Life Assurance Limited (“Cornerstone Life Assurance”)”, it added.