The Nigerian insurance industry is experiencing significant growth, as seven publicly listed insurance firms reported a 45% increase in their net assets in 2024. This surge highlights the sector’s improved financial strength and its ability to meet obligations, boosting investor confidence.
According to findings by BusinessDay, AIICO Insurance, AXA Mansard Insurance, Cornerstone Insurance, NEM Insurance, Coronation Insurance, Linkage Assurance, and Consolidated Hallmark Holdings collectively recorded a net asset value of N343.3 billion in 2024. This marks a substantial increase from N236.4 billion in 2023.
Leading the Market
AIICO Insurance topped the list with a net asset of N64.7 billion, closely followed by NEM Insurance at N59.8 billion and AXA Mansard Insurance at N52.7 billion. Analysts view this growth as a testament to the sector’s strengthened capital base, ensuring better claims settlement and business expansion.
“The increase in net assets indicates a move towards sustainable growth,” said Abiodun Adebayo, a financial analyst. “With stronger regulations and governance, more foreign and institutional investors are likely to show interest in the sector.”
Adebayo Olaniyi, another industry expert, echoed this sentiment, emphasizing that a robust capital base enhances trust among investors and policyholders, ensuring long-term stability.
Implications for the Industry
Net assets, also referred to as shareholders’ funds or book value, represent the total value of a company’s assets after deducting liabilities. A higher net asset value positions insurance firms to underwrite larger risks, expand their services, and attract foreign direct investment (FDI).
In 2024, the NGX Insurance Share Index was one of the top-performing sectors in the Nigerian stock market, demonstrating strong returns for investors. Insurance stocks rose from N391.38 in January to N718 by December 28, reflecting heightened investor confidence. However, this year has seen some profit-taking activities, leading to a decline from N710.08 in January to N689.68.
Despite the fluctuations, insurance firms saw significant profitability in 2024. A BusinessDay survey revealed that the seven companies collectively doubled their after-tax profit to N104.8 billion, compared to N58.6 billion in 2023.
Regulatory Developments and Future Projections
The industry’s strong performance aligns with efforts by the National Insurance Commission (NAICOM) to deepen insurance penetration in Nigeria. Ongoing regulatory reforms, including recapitalization initiatives, are expected to further bolster the sector.
A proposed ‘Nigeria Insurance Industry Reform Bill 2024,’ currently at the National Assembly, seeks to significantly raise the minimum capital requirements for insurance firms. If passed, life insurance companies will need a minimum of N15 billion (up from N2 billion), general insurance firms will require N25 billion (up from N3 billion), and reinsurance businesses will need N45 billion (up from N10 billion). These reforms aim to enhance financial stability and service delivery across the sector.
Performance Breakdown of Leading Insurance Firms
AIICO Insurance Plc
- Net assets grew to N64.7 billion from N51.9 billion.
- Total liabilities rose to N343.2 billion from N266.3 billion.
- Retained earnings increased to N25.6 billion from N16.7 billion.
- After-tax profit climbed to N14.9 billion from N13.8 billion.
AXA Mansard Insurance Plc
- Net assets rose to N52.7 billion from N41.4 billion.
- Total liabilities increased to N132.5 billion from N99.7 billion.
- Retained earnings surged to N34.1 billion from N14.4 billion.
- After-tax profit jumped to N14.3 billion from N10.9 billion.
Cornerstone Insurance Plc
- Net assets reached N54 billion from N34 billion.
- Total liabilities climbed to N60.5 billion from N48.6 billion.
- Retained earnings expanded to N29.8 billion from N14.1 billion.
- After-tax profit soared to N23.4 billion from N15.4 billion.
NEM Insurance Plc
- Net assets increased to N110.2 billion from N74.2 billion.
- Total liabilities grew to N50.5 billion from N35.6 billion.
- Retained earnings rose to N37.4 billion from N21.8 billion.
- After-tax profit advanced to N9.8 billion from N8 billion.
Coronation Insurance Plc
- Net assets climbed to N78.6 billion from N48 billion.
- Total liabilities rose to N39.8 billion from N23.7 billion.
- Retained earnings recovered to N10.2 billion from a loss of N1.7 billion.
- After-tax profit surged to N9.9 billion from N1.8 billion.
Linkage Assurance Plc
- Net assets expanded to N59.1 billion from N52.8 billion.
- Total liabilities grew to N21.8 billion from N19.8 billion.
- Retained earnings increased to N4.1 billion from N1.5 billion.
- After-tax profit stood at N9.4 billion.
Consolidated Hallmark Holdings Plc
- Net assets reached N56.3 billion from N26.2 billion.
- Total liabilities rose to N20.5 billion from N13.3 billion.
- Retained earnings surged to N21.6 billion from N3.4 billion.
- After-tax profit climbed to N23.1 billion from N3.8 billion.
Conclusion
The Nigerian insurance sector is on a trajectory of sustained growth, backed by stronger financial performance, regulatory reforms, and increasing investor confidence. As firms continue to strengthen their capital bases and expand their services, the industry is poised for greater success in the coming years.
