For the first time in three years, Regency Alliance Insurance Plc posted a year-on-year rise in Q1 profit, with profit after tax up 46.1 percent to N617.5 million in the first quarter ended March 31, 2026, from N422.6 million a year earlier, as a sharp rebound in net investment income more than offset weaker underwriting performance.
Insurance revenue for the quarter grew 5.85 percent to N2.96 billion from N2.80 billion in Q1 2025, driven mainly by the Motor segment, which more than doubled premium contribution to N771.2 million from N410.3 million, while Oil/Gas, the company’s largest line, declined to N877.4 million from N1.07 billion in Q1 2025.
Despite the revenue growth, Regency Alliance’s insurance service result, a measure of underwriting profitability, fell sharply by 56.2 percent to N118.3 million from N269.8 million a year earlier. This was not driven by claims, which actually improved, with insurance service expenses down 26.6 percent to N1.20 billion from N1.63 billion. Instead, the pressure came from net expenses on reinsurance contracts held, which surged 83 percent to N1.65 billion from N901.4 million, as the company gave significantly more premium to reinsurers during the quarter.
Net investment income rose 82.9 percent to N934.4 million from N510.9 million, even though interest income calculated on the effective interest method actually declined 18.7 percent to N358.9 million from N441.3 million, reflecting lower yields on some short-term placements.
The swing factor was a large unrealised fair value gain on the company’s quoted equity portfolio, which jumped to N582.9 million from N77.5 million in Q1 2025, a more than six-fold increase. Combined with a positive swing in net insurance finance income (N69.2 million from N34.1 million), the company’s net insurance and financial result rose 37.7 percent to N1.12 billion from N814.8 million.
Below the investment line, cost pressures were showing as employee benefit expenses rose 17.3 percent to N134.5 million, from N114.7 million in Q1 2025, while other operating expenses jumped 33.5 percent to N321.4 million from N240.7 million, on the back of higher bank charges, professional fees, and rent.
Profit before tax still grew 44.5 percent to N666.0 million, from N461.1 million, and after a 26.2 percent rise in income tax expense to N48.5 million, profit for the period settled at N617.5 million, up 46.1 percent year-on-year.
In the balance sheet section, total assets stood at N20.93 billion as of March 2026, down 3.4 percent from N21.68 billion in March 2025. Cash and cash equivalents fell 35 percent year-on-year to N1.13 billion from N1.74 billion, while reinsurance contract assets dropped 41.5 percent to N1.50 billion from N2.56 billion. Financial assets, however, grew 11.8 percent to N10.47 billion from N9.36 billion, helped by the fair value gains on quoted equities and higher treasury bill and bond holdings.
On liabilities, total liabilities fell 21.2 percent year-on-year to N5.74 billion from N7.28 billion, as insurance contract liabilities declined 26.8 percent to N3.46 billion from N4.72 billion and current tax liabilities dropped 65.5 percent to N117.7 million from N341.0 million.
Total equity rose 5.5 percent to N15.19 billion from N14.39 billion. However, the composition shifted; share capital surged 140 percent to N8.0 billion from N3.33 billion on the back of bonus share capitalisation, while retained earnings, the account from which those bonus shares were funded, dropped 76.5 percent to N1.30 billion from N5.51 billion.
Net cash used in operating activities was still negative at N616.8 million, though this was an improvement of 20.8 percent from a negative N778.9 million in Q1 2025, aided by lower claims paid net of recovery (N594.2 million from N1.47 billion).
Net cash from investing activities fell 82.5 percent to N60.8 million from N347.2 million, as the company increased its purchase of financial assets at amortised cost to N298.2 million from N80.8 million, and a drop in investment income received.
The company recorded no financing activity in either period. Overall, cash and cash equivalents declined by N556.0 million during the quarter, a wider drop than the N431.7 million decline recorded in Q1 2025, closing the period at about N1.14 billion before expected credit loss adjustments.
Regency Insurance has been volatile all year and made a year to date loss of 19.4 percent, bringing its current share price to N0.87 on the Nigerian stock Exchange with a market cap of N13.9 billion.