Claims hit $6.05 billion at Sovereign Trust Insurance amid expansion push

Sovereign Trust Insurance Plc has reported a sharp increase in claims payments for the 2025 financial year, disbursing N6.05 billion to policyholders, a significant increase from N4.2 billion in 2024.

This highlights increased use of insurance and growing exposure to risk across the country.

The company’s new CEO/CEO, Lucas Durojaiye, said the performance reflects strong customer confidence as the company embarks on an expansion journey to reach underserved market segments.

Durojaiye recently took the helm of Olaotan Soyinka, positioning the insurer for what he described as its “next phase of growth”.

“Our performance in 2025 is evidence of the trust our customers place in us,” he said, adding that the company plans to extend insurance coverage to more Nigerians nationwide.

The insurer recorded insurance revenues of N44.6 billion in 2025, an increase of 10.32% from N40.4 billion in the previous year.

Gross premiums received rose to 46.2 billion naira, up from 42 billion naira in 2024.

However, after accounting for a net liability of N1.6 billion for outstanding hedging obligations, recognized revenue stood at N44.6 billion.

After deducting 4.8 billion naira in other operating expenses, the combined insurance and investment result amounted to 1.025 billion naira, translating directly into profit before tax.

Insurance analysts say the increase in claims is not unusual in a period marked by inflation, insecurity, accidents, health problems and climate-related losses.

Industry observers point out that an increase in claims can indicate both increased policyholder activity and increased risk exposure.

However, analysts warn that sustained growth in claims without corresponding increases in premiums could put pressure on underwriting profitability.

Cash and cash equivalents represented N11.9 billion – the largest component of assets – suggesting strong liquidity to meet claims and operational needs.

Insurance contract liabilities stood at N13.05 billion, representing 55.18% of total liabilities. These obligations reflect expected future payments related to active policies.

Shareholder funds stood at N15.9 billion, supported partly by retained earnings of N621.3 million, strengthening the company’s capital base.

Financial analysts say the balance sheet indicates stability, but stress that profitability must improve to support long-term growth and shareholder value.

Durojaiye said the company aims to expand access to insurance across Nigeria, where penetration remains among the lowest globally.

While the increase in claims demonstrates active policy usage and customer confidence, experts stress that sustaining earnings growth will require disciplined underwriting and innovative products.