Regency Alliance Insurance Plc has projected a strong financial performance for the third quarter of the 2026 financial year, forecasting a Profit After Tax (PAT) of ₦932.24 million as the insurer seeks to strengthen its earnings through a combination of underwriting activities and investment income.
The outlook was disclosed in the company's Forecast Profit and Loss Information and Cash Flow Statement submitted to the Nigerian Exchange Limited (NGX), outlining management's expectations for the quarter.
According to the filing, the insurer expects its Profit Before Tax (PBT) to surpass the ₦1 billion mark, reaching ₦1.01 billion. The projected earnings are expected to be reduced by an estimated ₦81.06 million tax expense, resulting in the anticipated after-tax profit of ₦932.24 million.
Insurance revenue to exceed ₦8bn
Regency Alliance also forecast robust underwriting performance, projecting gross insurance revenue of ₦8.03 billion during the quarter.
The company expects to incur ₦4.00 billion in insurance service expenses, while net outflows from reinsurance contracts are estimated at ₦3.62 billion. After accounting for these costs, the insurer projects a net insurance service result of ₦417.79 million.
Investment income expected to boost earnings
Beyond its core insurance operations, Regency Alliance is counting on returns from its investment portfolio to support overall profitability.
The company forecast investment and other income of ₦883.79 million, highlighting the significant contribution of non-underwriting income to its earnings outlook.
Management also plans to maintain cost discipline, with management expenses projected at ₦288.28 million, as part of efforts to preserve profitability.
Cash flow outlook
On the liquidity front, the insurer expects its operating cash flow before working capital changes to stand at ₦547.31 million. However, after adjusting for working capital movements, net cash generated from operating activities is projected at ₦76 million.
The company also anticipates substantial financing and investment activities during the period. It projects net cash inflows of ₦5.24 billion from financing activities, which are expected to support ₦6.11 billion in net cash outflows for investing activities.
As a result, Regency Alliance forecasts a net decrease in cash and cash equivalents of ₦800.93 million over the quarter.
If the projections materialise, the insurer's cash and bank balances are expected to decline from an opening balance of ₦1.50 billion to approximately ₦695.58 million by the end of the third quarter of 2026.
The forecast underscores Regency Alliance Insurance's expectation of sustained profitability, driven by steady underwriting performance, disciplined cost management and strong investment returns, despite anticipated reductions in cash balances resulting from planned investment activities.