Despite strong market momentum driven by regulatory reforms, 15 insurance companies listed on the Nigerian Exchange Limited (NGX) recorded a 29 per cent decline in profit before tax (PBT) for the year ended December 31, 2025, as rising operating expenses eroded earnings.
Collectively, the insurers posted ₦110.47 billion in PBT in 2025, down from ₦157.7 billion in 2024, reflecting the growing impact of higher insurance service expenses, reinsurance costs, and operating overheads. The mixed performance highlights the widening gap between insurers able to manage cost pressures effectively and those struggling to adapt to a changing operating environment.
Winners and Laggards in a Challenging Year
While many operators felt the squeeze, a few companies delivered strong growth. AIICO Insurance Plc reported a 20 per cent increase in PBT to ₦18.98 billion, up from ₦15.8 billion in 2024. Mutual Benefits Assurance Plc recorded one of the strongest performances, with profit surging 78.9 per cent to ₦21.54 billion, while Universal Insurance Plc posted a 131.2 per cent jump in PBT to ₦4.6 billion.
On the downside, Lasaco Assurance Plc slipped into a ₦2.98 billion loss before tax, reversing a ₦1.63 billion profit in 2024, largely due to rising reinsurance and service costs. In contrast, Veritas Kapital Assurance Plc returned to profitability, moving from a ₦627 million loss in 2024 to ₦6.63 billion profit in 2025.
Other major insurers—including AXA Mansard, Cornerstone Insurance, Coronation Insurance, Guinea Insurance, International Energy Insurance, Linkage Assurance, NEM Insurance, Prestige Assurance, Regency Assurance, and Sunu Assurances Nigeria—also reported lower profits, citing escalating operating expenses. AXA Mansard recorded the steepest decline, with an 80.7 per cent drop in PBT, while International Energy Insurance saw profits fall by 78 per cent.
Investor Optimism Remains Strong Despite Earnings Pressure
Interestingly, the profit slump has not dampened investor appetite for insurance stocks. In 2025, the NGX Insurance Index surged by 65.6 per cent year-to-date, outperforming the broader NGX All-Share Index, which gained 51.2 per cent. The sector also emerged as the top-performing segment last week, rallying 41 per cent week-on-week, driven by optimism surrounding the newly enacted Insurance Industry Reform Act.
Market participants expect the new law—mandating higher capital requirements and compulsory insurance for property and other assets—to deepen insurance penetration and attract strategic and foreign investors. Analysts believe these reforms will fundamentally reshape the competitive landscape of the industry.
Reforms to Drive Consolidation, Analysts Say
According to analysts at CardinalStone Limited, the recapitalisation directive could pose significant challenges for smaller operators in an already fragmented market. They project a wave of mergers and acquisitions as undercapitalised insurers seek to meet the new capital thresholds within the stipulated timeframe.
“While the reforms are positive for the sector’s long-term outlook, we expect consolidation to accelerate as firms adjust to higher capital requirements and evolving regulatory standards,” the analysts said, adding that further guidance from regulators on implementation timelines and qualifying capital will be critical.
Conclusion
The 2025 financial results underscore a key reality for Nigeria’s insurance industry: growth prospects remain strong, but cost efficiency and scale will determine winners and losers. As recapitalisation and regulatory reforms gather pace, insurers that can balance rising operating costs with disciplined underwriting, strong governance, and strategic capital deployment are likely to emerge stronger in the next phase of industry transformation.
