Liberty Life Assurance has recorded a stronger top-line performance, with insurance revenue rising by 17.2% to UGX78.63 billion, up from UGX67.1 billion in 2024.
The company’s financial statements for the year ended December 31, 2025, indicate that the growth in insurance revenue was accompanied by an increase in profit after tax to UGX4.11 billion, compared to UGX3.73 billion a year earlier.
This reflects improved earnings across the company’s core insurance and investment operations.
Revenue growth strengthens
Insurance revenue increased by UGX11.53 billion, from UGX67.10 billion in 2024 to UGX78.63 billion in 2025.
This growth was mainly a result of the new business written on the group credit life line of business which had an 80% growth in the insurance revenue from UGX6 billion in 2024 to UGX11 billion in 2025, as well as due to organic growth from retained schemes during the year.
Insurance service expenses comprise the cost of providing insurance services mainly claims incurred, commission expenses, life fund reserves and directly attributable expenses.
These also moved upward, although at a slower pace, rising by 5.2%, from UGX55.33 billion to UGX58.19 billion, indicating that the growth in direct insurance costs remained below the pace of revenue expansion.
Net expense from reinsurance contracts held; during the year, Liberty Life reported a net expense from reinsurance contracts held of UGX5.44 billion, compared with net income of UGX1.04 billion in 2024.
This was higher than prior year as the company had fewer claim recoveries from reinsurers compared to prior year due to the changes in the health treaty and higher life treaty retention.
The reinsurance ratio closed at 15%, which is in line with the current year’s performance on gross written premium.
Reinsurance is important to mitigate, amongst other things, solvency risk and to reduce earnings volatility.
After accounting for reinsurance, the insurance service result stood at UGX15 billion, up from UGX12.8 billion in the previous year, indicative of a 17.2% growth and a strong underwriting result for the year.
Investment income provides additional support
Investment income on financial assets measured at amortised cost increased to UGX3.02 billion from UGX2.84 billion in 2024, representing a growth of 6.5%.
The increase reflects continued income generation from the company’s investment portfolio, particularly fixed-income assets.
The Company continues to focus on investment in well-secured institutions which deliver good returns.
Expected credit losses/ impairment on financial assets increased from UGX1.4 million to UGX7.5 million, although the amount remained relatively small compared to the overall investment income line.
Finance expense from insurance contracts issued increased from UGX383.9 million to UGX584.8 million, whereas finance income from reinsurance contracts held rose from UGX100.6 million to UGX111.6 million, all these in line with the growth in the group credit life insurance revenue as noted above.
Beyond underwriting and investment performance, distribution costs also remained a significant component of the company’s expense structure.
Bancassurance commission and related expenses increased from UGX7.5 billion in 2024 to UGX8.6 billion in 2025, representing an increase of UGX1.09 billion, or 14.6%.
The increase reflects the cost associated with distributing insurance products through banking channels and other intermediary networks, which continued to contribute to revenue growth during the year.
Other income remained modest at UGX29 million, up from UGX9.9 million in 2024, while other finance costs rose to UGX228.6 million from UGX174.2 million, mainly because of foreign exchange movements and interest earned on current accounts during the year.
The company also recorded an expected credit loss charge on premiums receivable from intermediaries of UGX56.2 million, compared to a positive movement of UGX26.2 million in 2024, reflecting provisions made against receivables linked to intermediary channels.
Meanwhile, other operating expenses or non-directly attributable expenses increased from UGX2.68 billion to UGX2.91 billion, representing a growth of 8.8%, mainly due to the increase in the individual retail business and marketing expenses in line with the Company’s strategy to focus on these areas of business.
Against that backdrop, profit before income tax increased from UGX5.04 billion in 2024 to UGX5.78 billion in 2025, representing a growth of 14.7%.
Income tax expense rose from UGX1.3 billion to UGX1.67 billion during the year, in line with the higher pre-tax profit position.
After tax, profit for the year increased from UGX3.73 billion to UGX4.11 billion, representing a growth of 10%.
Total comprehensive income was also UGX4.11 billion, as the company reported no other comprehensive income during the year.
Balance sheet expands to UGX56.4bn
The company’s balance sheet also expanded during the year, with total assets increasing by 16.7% from UGX48.36 billion to UGX56.42 billion.
The total assets were mainly comprised of 43% investment in debt investments at amortised cost of UGX24.4 billion, 24% reinsurance contract assets of UGX13.7 billion, and 14% other assets of UGX7.6 billion.
Management is focused on the growth of the asset base through premium revenue growth and investment in well secured institutions that deliver good returns.
Liabilities rise alongside business growth
On the liabilities side, total liabilities increased from UGX22.41 billion in 2024 to UGX28.37 billion in 2025, representing growth of 26.6%.
The total liabilities were mainly comprised of 46% insurance contract liabilities of UGX13 billion, 30% other financial liabilities of UGX8.5 billion, and 11% other liabilities of UGX2.9 billion.
The increase was mainly due to increase in key liabilities mainly insurance contract liabilities, other financial liabilities – relating to profit share payable under bancassurance agreements and other payables in line with the business growth during the year. These were subsequently settled in line with the respective service level agreements.
Shareholder funds and capital adequacy
Share capital remained unchanged at UGX4.5 billion during the year, while retained earnings increased from UGX21.45 billion to UGX23.56 billion, supported by the profit recorded in 2025.
As a result, total equity rose from UGX25.95 billion to UGX28.06 billion, representing growth of 8.1%.
The return on equity increased to 15% from 14% in the prior year, mainly driven by the profitability for the year.
Achieving sustainable returns underpins the Company’s ability to fulfil our promises to policyholders and other stakeholders.
Liberty Life remained solvent and well capitalized as at 31 December 2025, with the capital adequacy ratio improved from 360% in 2024 to 499% in 2025 and above the prescribed regulatory minimum capital adequacy ratio of 200%.
The Company continues to maintain adequate levels of capital required to cover regulatory and internal capital adequacy requirements and growth of the Company’s asset base.
Overall assessment
Supporting transparency, integrity and accountability in the financial reporting process remains an important part of who we are as Liberty Life Assurance, and achieving sustainable returns underpins the Company’s ability to fulfil its promises to policyholders and other stakeholders.
