Consolidated Hallmark Holdings Plc (CHH) has reported a sharp 65% decline in full-year profit, as a steep fall in investment income offset strong underwriting gains across its insurance operations.
The financial services and insurance holding company posted a profit after tax of N8.44 billion for 2025, down from N22.63 billion in the previous year, according to its audited results.
The performance marks one of the most significant earnings contractions in the insurance sector this reporting season.
Investment Income PlungesÂ
The primary drag on earnings was a dramatic contraction in investment returns. CHH’s investment result slumped 65% to N8.4 billion, compared with N23.83 billion in 2024.
The reversal was driven by:
- A N1.08 billion foreign exchange loss, compared with a N3.53 billion FX gain the year before
- A sharp decline in fair value gains on financial instruments, which fell to N2.9 billion, from N16.2 billion
- A slowdown in interest income growth despite an expanded balance sheet
Given that investment income accounted for the bulk of the Group’s earnings in prior years, the downturn had an outsized effect on profitability.
Insurance Operations StrengthenÂ
The profit slump occurred despite a marked improvement in CHH’s core insurance business.
Group insurance revenue rose 47% to N43.27 billion, supported by:
- Growth in general insurance premiums (N41.5bn)
- Expansion in HMO contributions (N1.52bn)
- First-time contributions from the life insurance subsidiary (N210.6m)
Insurance service result, a key performance measure under IFRS 17, more than doubled to N6.85 billion from N3.10 billion.
However, this improved technical performance was not enough to counter the collapse in investment income.
Rising Claims and Operating CostsÂ
Claims and related expenses increased in line with business growth. Total insurance service expenses rose 51% to N32.5 billion, while reinsurance costs remained elevated at N3.9 billion.
Operating expenses also continued their upward trajectory, rising 43% to N5.13 billion, pressured by:
- Higher staff costs
- Brand management and marketing expenses
- Professional and IT-related outlays linked to IFRS 17 implementation
Despite the drop in earnings, the Group’s balance sheet remained strong, with total assets rising 33% to N75.9 billion, reflecting growth in financial investments and cash holdings.
Shareholders’ funds increased to N42.16 billion, from N34.96 billion. The Board also recommended a final dividend of 15 kobo per share.
