Nigeria’s insurance industry delivered mixed financial performances in the first half of 2026, with AIICO Insurance and Cornerstone Insurance recording strong growth in insurance revenue, while NEM Insurance posted higher profit despite a decline in its core insurance revenue.
The contrasting results highlight the changing composition of insurers’ earnings, as underwriting performance and investment income increasingly combine to determine bottom-line profitability in an industry facing inflationary pressures, rising operating costs and a still-low insurance penetration rate.
The results of AIICO, NEM, Cornerstone and Linkage Assurance also come as the companies emerge from the industry’s recapitalisation exercise, placing greater attention on how effectively insurers are deploying their capital to grow their core insurance businesses and generate sustainable returns.
Nnenne Oyo, an investment research analyst at Meristem Securities, said the first-half results showed considerable volatility across the sector, with insurers relying on both underwriting efficiency and investment decisions to support profitability.
“Insurance business is not just about your underwriting efficiency. You also have to look through how you’re able to use your available capital to support and boost your investment decision and also support your bottom line,” Oyo said,in a recent televised interview.
Her assessment is particularly reflected in the contrasting performances of AIICO and NEM.
AIICO recorded a 14.53 percent increase in insurance revenue to N74.93 billion in H1 2026 from N65.43 billion a year earlier. Profit before tax rose to N15.05 billion, while profit after tax stood at N13.40 billion.
Oyo said AIICO’s performance was supported by broad-based growth and an expansion in its core insurance business, noting that the company recorded strong underwriting performance during the period.
However, she cautioned that rising operating expenses remained an issue for the insurer, as higher costs could limit the extent to which revenue growth translates into stronger margins.
“Although they’ve recorded broad-based growth both their revenue as well as their profit, their operating expenses also rose sharply,” she said, adding that the higher expenses had placed pressure on AIICO’s margins.
According to her, the key question for investors would be whether the improvement in AIICO’s profitability in the first half can be sustained through the remainder of the year and whether the company can reverse the downward trend previously seen in its margins.
NEM, meanwhile, delivered a markedly different earnings profile.
The insurer’s insurance revenue declined 4.26 percent year-on-year to N72.20 billion from N75.41 billion, yet profit before tax rose to N20.96 billion and profit after tax reached N18.09 billion.
The result was supported by a significant improvement in investment income, according to Oyo, who said NEM had successfully used its available assets to compensate for weaker growth in its core insurance revenue.
“What we’re seeing play out in NEM is that although revenue declined during the period, we can see them use their investment strategy to boost their bottom line significantly,” she said.
Oyo said NEM’s investment performance benefited from gains in both the equities and fixed-income markets, with fair-value gains appreciating significantly alongside increased fixed-income investments.
The development allowed the insurer to improve its margins despite the weakness in its top line.
“The company was able to use their assets well to boost their bottom line where their top line were a little shaky, so they were able to use other means available to them to support their bottom line and remain profitable in the period, even increasing their margins,” she said.
Cornerstone Insurance presented another variation of the trend.
The insurer’s insurance revenue increased 18.56 percent to N29.01 billion from N24.47 billion, while its insurance service result rose 8.9 percent to N8.87 billion.
However, profit before tax declined 18.10 percent to N6.12 billion, while profit after tax fell 21.78 percent to N5.26 billion.
The divergence between Cornerstone’s insurance operations and its bottom line was largely linked to higher net foreign exchange losses and lower fair-value gains during the period.
Linkage Assurance also recorded strong profit growth, with profit after tax jumping 74 percent to N3.11 billion from N1.79 billion.
However, the insurer’s insurance revenue grew by only six percent to N13.30 billion, while insurance service expenses increased 42 percent to N11.78 billion.
Investment and other income, meanwhile, rose 70 percent to N5.94 billion from N3.49 billion, providing a significant boost to overall earnings.
The four results therefore demonstrate different routes to profitability.
AIICO combined stronger insurance revenue with improved profitability, although rising expenses remain a concern. NEM delivered higher profit despite weaker insurance revenue by leveraging investment gains, while Cornerstone’s stronger underwriting performance was offset by market-related pressures. Linkage, meanwhile, benefited substantially from higher investment and other income despite rising insurance service expenses.
The results indicate that as insurers move beyond the recapitalisation exercise, the quality and sustainability of earnings could become increasingly important for investors.
According to analysts, stronger capital gives insurers greater capacity to underwrite risks and invest, but the H1 results show that the ability to convert that capital into sustainable underwriting profits, control operating and claims costs and manage investment portfolios could ultimately determine the strength of their earnings.
