Underwriting Strength Overshadowed by Insurance Finance Volatility
Enterprise Group Plc (EGL) released its FY2025 unaudited results on 30 January 2026, churning out a solid underwriting expansion but weaker overall earnings, largely driven by insurance finance volatility under IFRS 17. Profit after tax declined 7.8% y/y to GHS 337.8m as a sharp increase in insurance finance expenses, weaker reinsurance recoveries and adverse fair value movements offset strong insurance service and investment income growth. Insurance revenue rose 11.3% y/y to GHS 1.76bn, supporting a 79.1% increase in insurance service result to GHS 488.2m, driven by improved underwriting discipline and claims containment. However, insurance finance expense surged 401.9% y/y to GHS 451.5m, reflecting discount rate adjustments and liability remeasurements amid compressed interest rates. Consequently, net insurance service result declined 77.9% y/y to GHS 43.1m, highlighting earnings sensitivity to interest rate movements despite underlying underwriting improvements. Net investment income increased 20.4% y/y to GHS 511.4m, supported by higher yields and portfolio growth. Nonetheless, non-underwriting income was moderated by a GHS 8.8m fair value loss on investment property compared with a GHS 133.6m gain in FY2024. Operating expenses rose 13.5% y/y to GHS 341.7m, reflecting continued investment in digital platforms, distribution channels and business expansion. Operating cash flow strengthened 28.0% y/y to GHS 964.5m, supported by strong premium collections and improved working capital management. Investment outflows of GHS 651.3m reflected continued portfolio expansion, reinforcing future income generation capacity. Overall profitability remains sensitive to interest rate volatility, reinsurance recovery trends and cost discipline. With interest rates forecast to stabilise in the year ahead, we expect insurance finance expense volatility to ease following the sharp liability revaluation impact seen in 2025. While rates remain on a gradual decline, a more stable yield environment should support earnings stability and reduce pressure on overall profitability in 2026.