By NIyi JACOBS
Nigeria’s top listed insurance firms are experiencing their most profitable run in over a decade, driven by rising interest rates, stricter regulation, and better investment strategies.
A review of six major players—AIICO, NEM Insurance, Custodian, AXA Mansard, Leadway Assurance, and Cornerstone—shows that their combined pre-tax profits surged from ₦36 billion in 2019 to nearly ₦233 billion in 2024. This sixfold growth outpaces most other sectors in Nigeria’s struggling economy.
The profit boom is not coming solely from underwriting. Nigeria’s high-interest environment has delivered impressive gains from fixed-income investments, where insurers hold significant reserves. Higher treasury yields translated into stronger investment income, now a major earnings driver for the industry.
In parallel, improved regulatory enforcement, notably the “No Premium, No Cover” rule—which mandates upfront payment before insurance takes effect—has bolstered liquidity and reduced defaults across the board.
Among standout performers is NEM Insurance, which saw profits grow nearly twentyfold over five years. Custodian also delivered strong results, capitalizing on its scale across insurance and pensions. Cornerstone benefited from foreign exchange and investment returns, while AXA Mansard has grown steadily.
AIICO, though posting record profits in 2024, relied largely on investment gains rather than core insurance operations. Leadway Assurance, the only unlisted player in the group, boasts the largest balance sheet, exceeding ₦1 trillion in assets and over ₦73 billion in pre-tax profits.
Despite these wins, the insurance industry still lags behind banks and fintechs in capitalization, innovation, and market presence. No insurance firm features among Nigeria’s SWOOTs (Stocks Worthy Of Long-Term Investment) or on the NGX 30 Index.
With Nigerian banks raising capital and eyeing new revenue streams—including insurance—competition is heating up. Fintech startups, offering microinsurance and embedded products, are also encroaching on traditional insurers’ turf.
To survive, insurers may need to recapitalize, digitize, and scale quickly. Otherwise, they risk being leapfrogged by more agile players. Still, with profits and demand on the rise, the sector offers investors a compelling underdog opportunity.
