NEM Insurance Plc reported a decline in full-year profit in 2025, marking the first time in at least five years, despite a sharp rise in premium income, highlighting the growing pressure on insurers’ earnings from rising operating costs.
The Lagos-based insurer’s gross written premium rose 51 percent to N146.17 billion in 2025, up from N96.64 billion a year earlier, driven by stronger insurance revenue across its underwriting portfolio, according to its audited financial statements.
Still, profit after tax fell 17 percent to N24.09 billion, from N29.08 billion in 2024, as weaker investment returns and higher finance and management expenses offset gains from core insurance operations.
Insurance revenue climbed to N146.17 billion, while insurance service expenses rose to N84.77 billion, reflecting higher claims and contract-related costs in a year marked by elevated inflation and rising replacement costs across Nigeria’s economy.
As a result, insurance service result improved to N38.54 billion, compared with N18.14 billion in the prior year, highlighting stronger underwriting performance even as profitability came under pressure elsewhere.
Investment income, however, moderated. Net investment result declined to N15.45 billion, down from N23.06 billion in 2024, largely due to lower interest income and fair value gains compared with the previous year, when rising yields boosted returns on fixed-income securities.
The weaker investment performance weighed on overall earnings, despite a rise in net insurance and investment result to N60.40 billion, from N41.41 billion a year earlier.
Operating costs also increased. Management expenses climbed to N9.64 billion, compared with N7.92 billion in 2024, while finance costs rose to N713.95 million from N517.77 million, reflecting tighter financial conditions and higher borrowing costs across the economy.
Profit before tax declined to N27.92 billion, from N33.52 billion in the previous year, before income tax reduced net earnings.
The results highlight the diverging forces shaping Nigeria’s insurance sector, where premium growth has accelerated alongside economic recovery and regulatory reforms, but investment income has become less predictable amid interest rate volatility and currency pressures.
NEM Insurance did not immediately disclose a dividend alongside the results.
Shares of NEM Insurance have gained 26.5 percent since the year began, closing trading on Wednesday at N33.90. The stock ranks 34th on the NGX in terms of year-to-date performance and has accrued 29 percent over the past four-week period alone.