Nigerian Insurers’ Profits Plummet to N108.4bn Amid FX Volatility and Rising Claims

Nigeria’s insurance sector experienced a sharp downturn in profitability in 2025, as foreign exchange volatility, rising claims, and higher operating expenses squeezed underwriters’ earnings. According to an analysis of 17 publicly listed insurers on the Nigerian Exchange Limited (NGX), combined Profit After Tax (PAT) fell 34% to N108.38 billion, down from N165.33 billion in 2024. The drop follows a year of extraordinary FX-driven gains, signaling a recalibration of the sector’s earnings.

The decline was widespread, with 13 out of 16 companies reporting lower net profits. Cornerstone Insurance Plc suffered one of the steepest reversals, swinging from a N30.83 billion FX gain in 2024 to a N3.58 billion loss in 2025, leading to a 68% drop in PAT. AIICO Insurance Plc and Linkage Assurance Plc also reported significant losses due to currency swings, highlighting how heavily the sector’s profits had depended on foreign exchange gains in the previous year.

Beyond currency fluctuations, rising insurance service costs and claims further eroded margins. LASACO Assurance Plc posted the most dramatic reversal, recording a N3.07 billion loss in 2025 compared with a N1.52 billion profit the year before. Similarly, Regency Alliance and Sovereign Trust saw insurance service results dip, while companies like Prestige Assurance Plc and International Energy Insurance Plc grappled with falling investment income alongside rising expenses.

Despite profit pressures, total insurance revenue continued to grow, reaching N901.47 billion in 2025, a 29.8% increase from N694.34 billion in 2024. AXA Mansard Insurance retained its lead with N160.56 billion in revenue, while NEM Insurance recorded the fastest growth, rising 51.25% to N146.17 billion. The top three insurers—AXA Mansard, NEM, and AIICO—accounted for nearly half of the total sector revenue, showing that income expansion remains strong even amid declining profitability.

While some firms bucked the trend—Mutual Benefits Assurance Plc grew PAT by 84.5%, and Veritas Kapital turned a N1.09 billion loss in 2024 into a N6.46 billion profit—2025 largely reflected a “normalisation” after the FX windfalls of 2024. Industry experts say sustaining revenue growth while restoring profitability in 2026 will depend more on effective risk pricing, cost management, and resilient investment strategies rather than currency movements.

source: punch