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Kayode Tokede
As against the trend of positive corporate earnings in other sector of the Nigerian economy, the insurance sector has again taken the back seat as 12 leading quoted insurance companies on the Nigerian Exchange Limited (NGX) declared 43.8 per cent drop in profit.
Their unaudited results for half year ended June 30, 2025, showed that profit before tax declined to N68.7billion from N122.22 billion reported in half year ended June 30, 2024.
However, it was not all gloom as Mutual Benefits Assurance Plc, NEM Insurance Plc and Sovereign Trust Insurance Plc posted impressive growth in profit before tax.
For instance, Mutual Benefits Assurance in H1 2025 declared N12.29billion profit, about 287.8 per cent increase over N3.2 billion declared in H1 2024, while NEM Insurance announced N17. profit before tax, about 46.8 per cent increase over N12.22 billion posted in H1 2024.
In the period under review, Sovereign Trust Insurance announced N1.5billion profit before tax, representing an increase of 36 per cent from N1.11billion in H1 2024.
LASACO Assurance Plc emerged the worst performing company in the period under review with N518.12 million loss in H1 2025 from N3.47 billion profit before tax reported in H1 2024. The company said rising cost pressure, particularly from insurance service expenses and reinsurance costs impacted its profit generation in H1 2025.
The major players in the insurance sector, AIICO Insurance Plc, AXA Mansard Insurance Plc, Consolidated Hallmark Holdings, Cornerstone Insurance Plc, and Coronation Insurance Plc declared decline in profit.
AIICO saw its profit before tax at N12.48 billion in H1 2025, about 13 per cent decline from N14.38billion in H1 2024, while AXA Mansard Insurance announced N7.73billion profit before tax in H1 2025, about 72 per cent drop from N28.57billion posted in H1 2024.
Consolidated Hallmark Holdings reported N1.76billion profit before tax in H1 2025, a 83.6per cent decline from N10.78billion in H1 2024, while Cornerstone Insurance declared N6.7billion profit before tax in H1 2025, a drop of 76 per cent from N27.87billion in H1 2024.
In addition, Coronation Insurance announced N1.53billion profit before tax in H1 2025, a significant drop of 80 per cent from N7.66billion declared in H1 2024.
Despite challenges posed by the macro-economic environment, THISDAY can report that, the 12 insurance companies generated N429.56billion revenue in H1 2025, representing an increase of 42 per cent from N302.74billion reported in H1 2024.
AXA Mansard Insurance, followed by NEM Insurance declared the highest insurance revenue in H1 2025. As AXA Mansard Insurance declared N81.15billion revenue in H1 2025, about 24 per cent growth from N65.62billion in H1 2024, NEM Insurance saw it insurance revenue at N75.41billion in H1 2025, representing an increase of 66 per cent from N45.5billion in H1 2024.
However, the insurance companies’ stocks last week responded to the federal government’s new law requiring companies to raise fresh capital and making insurance for property and other assets mandatory.
This significant growth has outpaced the broader market, with the NGX All-Share Index rising by 3.18 per cent last week. The new law is expected to transform the insurance industry, increasing insurance penetration and attracting strategic and foreign investors.
Reviewing the sectoral performance, the Insurance sector emerged as the top performer last week, surging by an eye-catching 41 per cent week-on-week. This rally was driven by investor optimism surrounding the sector’s growth prospects following the enactment of the new Insurance Act, which has sparked expectations of recapitalisation and regulatory reforms.
Stocks such as Mutual Benefits Assurance, AIICO Insurance, Sovereign Trust Insurance and Cornerstone Insurance were at the forefront of the rally, each posting weekly gains above 50 per cent.
Insurance stocks top the gainers table for last week. Mutual Benefits Assurance led with a weekly gain of 60.44 per cent to close at N2.92 per share,while AIICO Insurance followed with a weekly gain of 59.06 per cent to close at N3.50,
Others are Sovereign Trust Insurance, Cornerstone Insurance, Veritas Kapital Assurance, Coronation Insurance and International Energy Insurance posted a weekly gain of 59.06 per cent, 54.46 per cent, 46.52 per cent and 46.48 per cent respectively.
Capital market analysts noted that the Insurance sector in particular is expected to remain in focus, given its reform-driven outlook and recent price momentum.
Speaking on the reform, CardinalStone said, “In our view, these reforms are expected to reshape the competitive landscape of the industry, with the recapitalisation directive likely to pose challenges for the relatively smaller operators, given the existing market fragmentation amidst other structural bottlenecks.
“Hence, we could see a wave of industry consolidation through mergers and acquisitions, as less-capitalised firms seek to meet the new thresholds within the stipulated time frame. Insurers would be required to comply with the new capital requirements within 12 months of the law’s commencement, as stipulated by the National Assembly. However, we expect further regulatory guidance on implementation timelines, qualifying capital, and transitional provisions.”
On their part, analysts at Afrinvest Research in a report stated that the global insurance industry in 2024 recorded its strongest topline performance in over a decade, with total premiums growing by 5.2per cent y/y to $7.8trillion, according to Swiss Re.
“This marked a significant recovery from the slower 2.3per cent growth in 2023. The non-life segment expanded by 4.7per cent y/y, benefitting from firm pricing and increased demand for protection in health, property, and cyber insurance. Meanwhile, the life insurance segment rebounded, growing 6.1per cent y/y, as the higher rate environment supported annuity products and long-term savings instruments,” the report explained.
The report noted that beyond premium expansion, the industry experienced notable structural transformation. The InsurTech sector grew by 8.5per cent to $28.1billion, buoyed by increased adoption of embedded insurance, AI-driven underwriting, and digital distribution models.
“Meanwhile, the cyber insurance segment grew to $15.3billion, supported by a 40per cent increase in SME uptake, as global businesses sought protection from mounting digital threats. Despite these gains, protection gaps remain large as cyber losses stood at $945.0billion in 2024, with nearly 90 per cent uninsured,” the report stated.
Despite 2024’s strong performance, analysts at Afrivest Research noted that the outlook for 2025 appears more cautious.
“Global premium growth is forecast to slow to two per cent, reflecting heightened macroeconomic uncertainties, policy instability in advanced markets, and a broader global economic slowdown.
“In Nigeria, the insurance industry continued to perform strongly after hitting the N1.0trillion mark in GPW in 2023, with Gross Premium Written (GPW) rising by 55.8per cent y/y to N1.6trillion.
“The non-life segment dominated (N808.4 billion, 68.9per cent of GPW), driven by strong uptake in oil & gas, fire, and motor classes. The surge in premium was primarily underpinned by regulatory enforcement of compulsory insurance, inflation-driven repricing, and naira depreciation following FX liberalisation (which revalued foreign currency premiums).
“Despite sector-wide structural challenges, underwriting performance improved significantly. Industry-wide insurance revenue (proxied by AIICO, CONHALLP, CORNERST, MANSARD, NEM, and WAPIC) rose 66.3per cent y/y to N455.5billion, while total Insurance Service Result soared by 152.6per cent y/y to N36.3billion.
“Underwriting margins improved by 2.7ppts to eight per cent, and sector Return on Average Assets (ROAA) and Return on Average Equity (ROAE) averaged 24.6per cent and 53.7per cent, respectively, highlighting operational efficiency and stronger balance sheet deployment.
“Meanwhile, the long-overdue recapitalisation directive regained momentum. Following the passage of the Nigeria Insurance Industry Reform Bill 2024 by the National Assembly, and NAICOM’s release of its risk-based capital exposure draft, the stage is now set for an industry shake-up. Under the proposed minimum capital thresholds, a wave of mergers, equity injections, and asset revaluations is expected to follow,” the report disclosed.
Looking ahead, Afrinvest Research added that the industry is poised for a transformative year in 2025.
“Following the foundational progress made in 2024, we expect that the recapitalisation mandate will drive strategic activity across the sector, particularly mergers, acquisitions, and capital raising efforts. “This process will likely result in a more consolidated market structure, with fewer but stronger players that can underwrite larger risks, expand product offerings, and scale operational efficiencies. As capital adequacy improves, we anticipate a gradual shift toward high-value segments, supported by stronger balance sheets and improved governance,” the report added.
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