Lagos — Nigeria’s insurance sector may still be lagging behind the broader equities market in 2026, but leading stockbroking firms are signalling growing confidence in select insurers, with AIICO Insurance and NEM Insurance Plc emerging among their strongest Buy recommendations.
A review of equity research reports from Cowry Asset Management, Blue Marina Research, Arthur Steven Asset Management and Meristem Securities shows that while the insurance index remains the weakest-performing major sector on the Nigerian Exchange (NGX), analysts believe several insurance stocks are trading below their intrinsic value, presenting attractive opportunities for investors.
The positive outlook comes as the Nigerian equities market rebounds from a sharp correction in June that wiped more than ₦13 trillion from investors’ wealth before recovering strongly in early July.
Although the NGX Insurance Index remained in negative territory as of July 13, its year-to-date loss narrowed to 6.81 per cent from 7.67 per cent recorded at the end of June, suggesting improving investor sentiment toward insurance stocks.
AIICO emerges top insurance consensus pick
Among insurance companies, AIICO Insurance Plc secured the strongest consensus recommendation, earning Buy ratings from Blue Marina, Arthur Steven and Meristem Securities.
The three investment firms placed target prices within a relatively narrow range of ₦5.64 to ₦5.80 per share, indicating broad agreement on the company’s valuation and future earnings prospects.
The average target price of approximately ₦5.70 implies an expected upside of about 44 per cent from the reference market price used in the analysts’ reports.
Research analysts attributed the optimistic outlook to AIICO’s improving underwriting performance, stronger earnings trajectory and attractive valuation metrics, arguing that the stock continues to offer significant value despite recent market gains.
The relatively close alignment in target prices also suggests greater confidence in the insurer’s fundamentals compared with several other stocks where valuation estimates differed considerably.
NEM Insurance posts highest projected upside
NEM Insurance Plc also featured prominently among analysts’ preferred insurance stocks, receiving Buy recommendations from Blue Marina, Arthur Steven and Meristem.
The firms projected target prices ranging between ₦36.97 and ₦46.15 per share, translating to an average target price of about ₦42.61.
Based on the reference prices adopted in the reports, the recommendations imply an average potential capital appreciation of roughly 58 per cent—the highest projected upside among the leading non-bank consensus picks reviewed.
While the wider spread in target prices reflects differing valuation assumptions, analysts maintained that NEM’s earnings growth, underwriting profitability and relatively modest valuation continue to support a positive investment case.
Insurance sector trails broader market
Despite the favourable outlook for selected insurers, the insurance sector has underperformed other segments of the Nigerian stock market this year.
Banking, oil and gas, industrial goods and consumer goods have all recorded stronger year-to-date gains as investors responded positively to robust corporate earnings and improving macroeconomic sentiment.
In contrast, insurance stocks have been slower to recover from the June market correction, although analysts believe the sector’s weaker performance has created attractive entry opportunities for long-term investors.
The broader market has staged a notable rebound since the sell-off, with the NGX All-Share Index rising to a year-to-date return of 55.35 per cent by July 13, up from 47.43 per cent at the close of June.
Banks dominate analysts’ recommendations
Outside the insurance sector, banking stocks continued to dominate brokers’ Buy lists.
Zenith Bank emerged as the strongest overall consensus pick after receiving Buy recommendations from all four research houses, while United Bank for Africa (UBA), Access Holdings, Ecobank Transnational Incorporated (ETI), Fidelity Bank and GTCO also attracted predominantly positive ratings.
Analysts cited low valuation multiples, resilient profitability, strong dividend prospects and healthy returns on equity as key drivers of their bullish outlook for the banking sector.
Among non-financial stocks, Dangote Cement, MTN Nigeria, NASCON Allied Industries and Cadbury Nigeria also featured prominently on brokers’ preferred investment lists.
Valuation remains key investment driver
Market analysts noted that many fundamentally strong companies continue to trade below estimated fair value despite the recent recovery, creating opportunities for investors willing to take a medium- to long-term view.
For insurance companies, improving underwriting margins, stronger earnings quality and continued industry reforms are expected to support future share price performance, although investors remain cautious about broader market sentiment and sector-specific challenges.
