Amid Hike in OPEX, 15 Insurance Firms Suffer 29% Profit Slump

Kayode  Tokede 

Despite a good showing last year as a result of ongoing reforms in the insurance sector, 15 insurance companies listed on the Nigerian Exchange Limited (NGX) have declared 29 per cent drop in profit before tax for the year ended December 31, 2025.

Cumulatively, the 15 insurance companies posted N110.47 billion profit before tax in 2025 as against N157.7 billion earned in 2024.   

Insurance companies’ 2025 accounts witnessed mixed performances during the period under review with AIICO Insurance Plc, Mutual Benefits Assurance Plc and Universal Insurance Plc declaring a significant increase in profit before tax.

For instance, AIICO Insurance declared N18.98 billion profit before tax, nearly 20 per cent increase over N15.8 billion reported in 2024. 

Mutual Benefits Assurance announced  N21.54billion profit before tax, representing an increase of 78.9 per cent from N12.04billion in 2024, while Universal Insurance Plc reported N4.6 billion profit before tax in 2025, a significant increase of 131.2 per cent from N1.99 biillion in 2024.  

Lasaco Assurance Plc recorded a loss before tax in 2025, while  Veritas Kapital Assurance Plc migrated from a loss position in 2024 to  profitability in 2025.  

Also, Lasaco announced a loss before tax of N2.98billion from N1.63billion profit before tax in 2024, while Veritas Kapital Assurance migrated from a loss of N627million to N6.63 billion in 2025. 

The rising cost pressure, particularly from insurance service expenses and reinsurance costs impacted on LASACO Assurance  profit generation in 2025. 

Other major players in the insurance sector: Axa Mansard Insurance Plc, Cornerstone Insurance Plc, Coronation Insurance Plc, Guinea Insurance Plc, International Energy Insurance Plc, Linkage Assurance Plc, NEM Insurance Plc, Prestige Assurance Plc, Regency Assurance Plc and Sunu Assurances Nigeria Plc reported a drop in profit before tax blaming increasing operating expenses. 

Axa Mansard Insurance with about 80.7 per cent drop in profit before tax led others with the worst performance in 2025, followed by International Energy Insurance that declared N688.8 million profit before tax, about 78 per cent drop from N3.16 billion reported in 2024. 

The insurance stocks had last year responded to the federal government’s new law requiring companies to raise fresh capital and making insurance for property and other assets mandatory.

With a strong Year-to-Date (YtD) performance above 65.6 per cent in 2025, the NGX insurance Index outperformed the overall NGX All-Share Index  performance of 51.2 per cent in 2025.

The new law is expected to transform the insurance industry, increasing insurance penetration and attracting strategic and foreign investors.

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.

Capital market analysts believe the Insurance sector will remain in focus, given its reform-driven outlook and recent price momentum.

Commenting, analysts at CardinalStone Limited said that, “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.”