By Josiah Nkemakolam
Cornerstone Insurance Plc delivered a resilient first-quarter performance for the period ended March 31, 2026, leveraging strong insurance revenue growth, a significantly expanded investment portfolio, and robust fair-value gains to navigate a challenging operating environment marked by foreign exchange volatility and rising insurance finance costs.
The insurer reported a profit after tax of N1.48 billion, while total comprehensive income surged to N3.39 billion, representing a 60 per cent increase from N2.11 billion recorded in the corresponding period of 2025.
The performance reflects the company’s ability to sustain underwriting profitability while capitalizing on opportunities in Nigeria’s high-yield fixed-income market and financial asset investments.
Insurance Revenue Records Double-Digit Growth
A major highlight of the quarter was the growth in insurance revenue, which rose by 25.2 per cent to N14.01 billion, compared with N11.19 billion reported in the first quarter of 2025.
The increase indicates stronger premium generation across the insurer’s business lines and reinforces management’s efforts to deepen market penetration despite intense competition within Nigeria’s insurance industry.
At the same time, insurance service expenses declined to N6.07 billion from N7.45 billion a year earlier, suggesting improved claims experience and greater efficiency in underwriting operations.
However, the benefits of stronger premium income were partially offset by a substantial increase in net expenses from reinsurance contracts held, which climbed to N4.67 billion from N473 million in the corresponding period of 2025.
Despite the sharp rise in reinsurance-related costs, Cornerstone maintained an insurance service result of N3.27 billion, virtually unchanged from the N3.27 billion achieved in the previous year.
This stability demonstrates the insurer’s ability to manage underwriting risk while preserving profitability.
Investment Portfolio Becomes Earnings Anchor
Beyond underwriting operations, investment activities remained a critical contributor to earnings.
Interest revenue nearly doubled to N2.22 billion, compared with N1.15 billion in the first quarter of 2025, reflecting increased exposure to income-generating financial assets and the benefit of elevated interest rates in the Nigerian economy.
Other investment income rose sharply to N2.07 billion from just N7.6 million in the prior-year period, highlighting stronger returns from the company’s diversified investment portfolio.
Overall investment returns stood at N2.48 billion, remaining broadly consistent with the N2.50 billion reported a year earlier.
The performance underscores the strategic importance of investment income to insurance companies, particularly during periods when underwriting margins face pressure from rising costs and economic uncertainty.
Foreign Exchange Losses Weigh on Bottom Line
One of the most significant challenges during the quarter was the impact of currency movements.
Cornerstone recorded a foreign exchange loss of N1.81 billion, a sharp reversal from the N1.18 billion gain reported in the first quarter of 2025.
The loss reflects continuing volatility in Nigeria’s foreign exchange market and its effect on financial institutions holding foreign-currency-denominated assets or liabilities.
Additionally, net finance expenses from insurance contracts issued increased significantly to N1.69 billion, compared with N252 million in the corresponding period last year.
Although the company recorded finance income of N93 million from reinsurance contracts held, total net insurance finance expenses remained elevated at N1.60 billion.
As a result, net financial result declined to N884 million from N1.44 billion in the prior-year period.
Profitability Remains Strong
Despite macroeconomic pressures and higher finance costs, Cornerstone delivered a profit before tax of N1.73 billion.
After accounting for a tax charge of N243 million, profit after tax settled at N1.48 billion, compared with N1.65 billion in the first quarter of 2025.
Profit attributable to shareholders stood at N1.50 billion, while earnings per share came in at 8 kobo, slightly lower than the 9 kobo reported a year earlier.
Notably, management expenses declined by over 12 per cent to N2.49 billion, compared with N2.84 billion in the prior year.
The reduction reflects management’s focus on cost discipline and operational efficiency, helping to preserve profitability amid a difficult business environment.
Balance Sheet Strength Continues to Improve
Cornerstone’s financial position remained robust, with total assets increasing to N144.47 billion as of March 31, 2026, from N141.03 billion at the end of December 2025.
The growth was driven largely by expansion in financial investments.
Financial assets measured at fair value through profit or loss increased to N52.10 billion from N46.03 billion, while assets measured at fair value through other comprehensive income rose to N41.65 billion from N41.10 billion.
Financial assets measured at amortised cost more than doubled to N2.96 billion, compared with N1.29 billion at year-end.
Premium receivables surged to N1.89 billion from N754 million, indicating stronger premium generation and increased business activity during the quarter.
Although cash and cash equivalents declined to N18.10 billion from N24.17 billion, the reduction was largely attributable to strategic deployment of liquidity into higher-yielding investments.
Shareholders’ Funds Rise Above N75 Billion
The insurer’s capital position strengthened further during the quarter.
Total equity increased to N76.28 billion, compared with N72.86 billion at the end of 2025.
Shareholders’ funds attributable to owners of the company rose to N75.29 billion, while retained earnings increased to N39.12 billion from N37.28 billion.
Fair value and other reserves recorded a substantial increase to N13.10 billion, driven by unrealised gains on investment securities classified under FVOCI.
These gains contributed significantly to the group’s total comprehensive income and enhanced overall shareholder value.
Insurance Liabilities Reflect Growing Business Volume
Insurance contract liabilities rose to N57.32 billion, up from N55.08 billion at year-end 2025, reflecting growth in the company’s policyholder obligations and expanding insurance portfolio.
Meanwhile, total liabilities remained relatively stable at N68.19 billion, indicating prudent balance-sheet management despite growth in business activities.
Cash Flow Signals Aggressive Investment Strategy
Cornerstone generated insurance premium receipts of N16.54 billion during the quarter, up from N13.83 billion a year earlier.
However, the company recorded a net operating cash outflow of N198 million, a marked improvement from the N853 million outflow reported in the corresponding period of 2025.
Investing activities accounted for the largest cash movement, with net cash used amounting to N5.17 billion, driven mainly by acquisitions of financial assets totaling more than N7.25 billion.
The investment-led strategy reduced cash balances but positioned the company to benefit from future income generation and capital appreciation.
Cornerstone Insurance enters the remainder of 2026 with a stronger balance sheet, improved capital base and a growing investment portfolio.
While foreign exchange volatility and rising insurance finance expenses remain key risks, the company’s stable underwriting performance, expanding revenue base and strong reserve position provide a solid foundation for future growth.
For investors, the first-quarter results reinforce Cornerstone’s position as one of Nigeria’s financially resilient insurers, with management successfully balancing profitability, capital preservation and long-term investment expansion in a challenging economic landscape.