NEM Insurance Plc recorded a 30.54 per cent increase in profit before tax to N31.02bn for the nine months ended September 30, 2026, surpassing its full-year 2025 earnings on the back of improved insurance operations and higher investment returns.
The insurer’s unaudited financial statements filed with the Nigerian Exchange Limited (NGX) showed that profit before tax rose from N23.77bn in the corresponding period of 2025 to N31.02bn in the period under review.
Profit after tax also increased by 30.54 per cent to N26.77bn, compared with the previous year’s corresponding period.
The nine-month profit before tax exceeded the N27.98bn recorded for the entire 2025 financial year, although higher reinsurance expenses, foreign exchange losses and management costs continued to weigh on performance.
Insurance operations support earnings
NEM Insurance’s insurance revenue increased by 7.68 per cent to N115.69bn, while insurance service expenses declined by 6.16 per cent to N63.49bn.
Consequently, the insurance service result rose by 22.07 per cent to N20.81bn.
Motor insurance remained the company’s largest revenue contributor, generating N33.28bn during the period. Oil and gas insurance followed with N31.48bn, while fire and marine insurance contributed N19.52bn and N14.17bn, respectively.
Motor insurance also delivered the largest insurance service result at N11.67bn, ahead of marine insurance at N3.93bn and fire insurance at N2.53bn.
Investment income provided additional support for earnings. Interest income increased by 23.46 per cent to N9.47bn, while the net investment result rose by 37.12 per cent to N19.03bn.
The combined insurance and investment result consequently grew by 26.86 per cent to N38.55bn.
However, net expenses on reinsurance contracts climbed by 38.11 per cent to N31.39bn from N22.73bn in the corresponding period of 2025, significantly outpacing the growth in insurance revenue.
Net foreign exchange losses also increased to N3.61bn from N974.54m, while management expenses rose by 12.78 per cent to N7.43bn.
The growth in investment returns and insurance service performance helped offset these higher costs, supporting the increase in pre-tax profit.
Assets and investment portfolio expand
NEM Insurance’s total assets increased by 14.35 per cent to N204.22bn as of September 30, 2026, from N178.59bn at the end of December 2025.
Total liabilities rose by 6.74 per cent to N100.97bn, while shareholders’ equity grew by 22.91 per cent to N103.26bn. Retained earnings stood at N69.73bn.
Insurance contract liabilities increased by 28.79 per cent to N81.78bn, with liabilities for remaining coverage rising to N53.10bn from N36.90bn.
The company’s investment portfolio also expanded. Listed equities measured at fair value through profit or loss rose to N31.98bn from N18.40bn, while investments measured at amortised cost increased to N88.63bn from N76.78bn.
Despite the expansion in assets and investments, cash and cash equivalents declined by 55.64 per cent to N12.25bn from N27.61bn at the end of 2025.
Cash flow remains a concern
The company recorded negative operating cash flow of N1.06bn during the nine-month period, compared with positive cash flow of N10.35bn in the corresponding period of 2025.
Investing activities generated a net cash outflow of N7.01bn, while financing activities recorded an outflow of N7.29bn, largely reflecting dividend payments.
The statement of changes in equity showed dividend payments of N7.52bn, up from N5.02bn a year earlier.
The divergence between rising accounting profits and weaker operating cash flow highlights the importance of monitoring the company’s cash generation alongside its earnings growth.
NEM shares gain 2.61% year to date
NEM Insurance shares traded at N27.50 during the early trading session on Thursday, October 29, according to the market data provided.
The stock started the year at N26.80, representing a year-to-date gain of approximately 2.61 per cent.
It reached a high of N34.45 on September 2 before retreating, while its reported year low was N25.50 on July 9.
The company’s issued share capital remained at approximately 5.016 billion shares, with substantial shareholders collectively holding 40.60 per cent.
NEM Insurance’s nine-month results point to stronger insurance service performance and investment returns. However, rising reinsurance expenses, increased foreign exchange losses and weaker operating cash flow remain important factors for investors to monitor as the company approaches the final quarter of 2026.
