Nigerian Insurance Sector Forecasts Profit Decline Despite Revenue Boost

Four leading Nigerian insurance companies are bracing for a significant dip in combined after-tax profits for Q2 2025, forecasting N14.1 billion in earnings, a 29.9% fall from the N20.1 billion posted during the same quarter last year.

The firms include AXA Mansard Insurance Plc, Consolidated Hallmark Holdings Plc, Linkage Assurance Plc, and Sunu Assurance Nigeria Plc.

Despite the expected decline in net profit, top-line revenue is projected to climb to N117.03 billion, more than double the N56.72 billion recorded in the comparable period. The earnings drop has been linked to currency losses, reversing gains posted in the same quarter last year.

In Q1, the group collectively recorded a net foreign exchange loss of N101 million, compared to a gain of N3.4 billion during Q1 2024. AXA Mansard stood out with a positive performance, reporting a gain of N2.3 billion from FX transactions.

Official second-quarter FX data is still pending release, but analysts believe that the stability observed in Nigeria’s foreign exchange market in H1 2025 may reduce such losses in the coming periods.

However, investor confidence in the insurance sector remains subdued. The NGX Insurance Index managed only a 5.23% return year-to-date, placing it among the weakest performers on the Nigerian Exchange.

Stock performance for the insurers has also been mixed. Consolidated Hallmark Holdings Plc saw its share price fall to N2.98 from N3.06. Sunu Assurance dipped from N5.75 to N5.14. AXA Mansard’s stock rose marginally from N9.22 in January to N9.25 in June, while Linkage Assurance’s share price held steady at N1.50.

Analysts point to weak earnings prospects and persistent macroeconomic headwinds as the main factors dragging sentiment in the sector.