Nigeria’s top listed insurance firms are in the middle of what could be described as their most profitable period in over a decade, buoyed by a mix of rising interest rates, regulatory enforcement, and smart investment allocation.
According to a Nairametrics review of six major players, AIICO, NEM Insurance, Custodian, AXA Mansard, Leadway Assurance, and Cornerstone combined profits before tax surged from just N36 billion in 2019 to nearly N233 billion in 2024.
That’s more than a sixfold increase in five years, a growth rate that outpaces most sectors in the country’s fragile economy.
This boom is being driven by more than just insurance underwriting. Nigeria’s high-interest rate environment has boosted returns on fixed-income securities, where insurers typically park large chunks of their capital. As treasury yields rose, so did their investment income, now a key driver of profitability for most insurers.
At the same time, a more disciplined regulatory approach has strengthened their cash flow positions. Enforcement of the “No Premium, No Cover” rule, which requires premiums to be paid upfront before coverage kicks in, has reduced defaults and improved liquidity across the industry.
Among the breakout performers is NEM Insurance, which has seen profits grow nearly twentyfold over the five-year period, underpinned by gains in both core insurance and investment operations.
Custodian, with its broader presence across insurance and pensions, has also posted strong growth, leveraging its size and investment muscle.
Cornerstone, though more reliant on FX and investment returns, has recorded impressive headline numbers. AXA Mansard, meanwhile, has taken a more measured and consistent approach to growth.
AIICO stands out for different reasons. While it recorded its highest-ever profit in 2024, the achievement was largely the result of investment income, not core insurance operations, which ran at a loss. That makes its future performance more sensitive to shifts in the market, particularly in interest rates or foreign exchange.
Then there’s Leadway Assurance; the only company in this group that is not publicly listed. Leadway is one of the established names in the industry. Its balance sheet has expanded from N394.8 billion in 2019 to over N1.025 trillion in 2024, the largest among the companies analyzed. Its profit before tax soared to N73.6 billion, from N11.3 billion five years earlier, making it not just the biggest by assets, but also among the most profitable.
Yet, despite these recent wins, Nigeria’s insurance industry remains a shadow of its financial services cousins — the banks and even the increasingly assertive fintech sector.
To put it in perspective, Access Holdings Nigeria’s largest bank by assets, is bigger than the entire listed insurance industry combined. The disparity is stark and speaks to just how undercapitalized and structurally weak the insurance sector still is.
There are no insurance firms among Nigeria’s SWOOTs, the group of Stocks Worthy of Long-Term Investment — a telling sign of investor sentiment.
In terms of market capitalization, they lag far behind not just banks, but even many industrial and telecom firms. No insurance firm is on NGX30, the 30 most valuable companies on NGX
And the threats are mounting. As Nigerian banks raise fresh capital under the CBN’s new recapitalization drive, many are looking to sweat their balance sheets and expand into new revenue lines.
Insurance is an obvious target. Some banks are already making quiet incursions into the sector, leveraging superior tech, customer base, and stronger capital buffers to compete.
Fintechs, too, nimble and aggressive, are circling — offering microinsurance, embedded policies, and tech-first experiences that traditional insurers struggle to match.
This leaves the insurance industry at a crossroads. To remain relevant in a fast-growing economy, it must either recapitalize significantly or risk being leapfrogged by more agile competitors. Without capital, scale, or technology, many insurers may simply be unable to keep up.
Still, in the short term, the numbers are difficult to ignore. Profits are up. Revenues are growing. Investment income is flowing. And with a growing economy comes rising demand for insurance, from life to health to business coverage. The sector is booming, even if it hasn’t quite caught up to its potential.
For investors, the opportunity is clear: insurance may still be small and structurally weak, but at current valuations and growth rates, it just might be the underdog worth watching.
