Coronation Insurance Eyes Bigger Risks After Recapitalisation, But Shareholders Want Dividends
By Aboki Forex —
Coronation Insurance Plc says its stronger capital base will allow it to take on larger insurance risks and grow premium income. Managing Director Olamide Olajolo told shareholders at the company's virtual annual general meeting on Thursday, September 24, that both its life and non-life businesses had met their recapitalisation requirements.
He said only about N1.3 billion of additional capital was needed to complete the life business's recapitalisation, leaving the group with more capacity to pursue larger risks. "Both companies are fully recapitalised, and we are geared to move from capital to capacity going forward," Olajolo said.
From capital to capacity
The company also plans to invest in technology, develop new products and deepen its reach among small businesses and underserved customers. On the Abuja property, management said it was still under construction and had yet to start generating revenue.
But shareholders are already looking beyond the capital raise to what it will deliver for them. Bisi Bakari questioned why profit declined despite the strong increase in insurance revenue. Eric Akinduro sought clarity on when dividend payments would resume. Tunji Bamidele raised the issue of shareholder returns, asking whether bonus shares could be considered if dividends were not paid.
Profit fell even as revenue jumped in 2025
Their concerns reflect what happened to Coronation's bottom line in 2025. Insurance revenue rose 51.4% to N74.83 billion, but profit after tax fell to N7.52 billion from N11.91 billion. The strong growth in insurance business did not translate into higher profit.
Management attributed much of that decline to factors outside the core insurance business. Olajolo said Coronation moved from an exchange gain of about N8.5 billion in 2024 to an estimated exchange loss of N1.3 billion in 2025. The company also paid two substantial oil and gas claims linked to events in 2024, which management described as one-off claims.
H1 2026 shows improvement, but dilution raises the bar
H1 2026 already shows some improvement. Insurance revenue rose 14.8% to N37.81 billion, while the insurance service result increased 29.3% to N6.06 billion, showing stronger performance from the core insurance business. Investment and other income also improved, while finance expenses eased. These gains helped profit before tax rise 18.9% to N4.05 billion. Profit after tax nearly doubled to N3.13 billion, although that stronger bottom-line growth was also helped by a much lower tax charge.
Earnings per share stood at 13.1 kobo in H1 2026, higher than the 6 kobo recorded in the same period last year, but just 42% of 2025 full year earnings per share. The group had about 23.99 billion shares at the end of June. It subsequently listed 4.53 billion placement shares, taking the total to about 28.53 billion.
To match its 2025 earnings per share of 31 kobo on the enlarged share base, Coronation would need full-year profit of about N8.84 billion. With N3.13 billion earned in H1 2026, the insurer would need to generate about N5.71 billion in H2, roughly 83% more than its first-half profit.
Non-attributable operating expenses rose 87% to N6.33 billion from N3.38 billion, eating into some of the gains from the stronger insurance business. Group retained earnings increased to N17.22 billion in H1 2026 from N15.50 billion at the end of 2025. The share price has fallen about 32% year-to-date.
For shareholders, the issue is no longer just whether Coronation can write more premiums, but whether the additional business can produce higher profit after claims and expenses and eventually support a return to dividends. A stronger case for dividends would come from sustaining profit growth in H2, controlling costs and showing that the new capital is beginning to generate additional earnings.