NEM Insurance Eyes N19.7bn H1 Profit on Oil Reforms, Rising Energy Premiums

NEM Insurance Plc is leveraging on the ongoing oil and gas industry reforms by the present administration which is bringing new field development and investment to help Nigeria secure a stronger energy security measures across the energy value chain.

Foreseeing the significant progress in the future the underwriting firm is projecting a Profit After Tax (PAT) of about N19.7 billion for the first half of 2026, targeting strong underwriting performance and rising premiums from oil and gas policies which are expected to strengthen the insurer’s earnings outlook.

The projected profit translates to an estimated earnings per share of N3.95 and represents a notable increase from the N15.4 billion recorded in 2025, which had already marked a great improvement from the N10.6 billion posted in 2024.

The company’s forecast is anchored on insurance revenue expected to rise significantly to N102.4 billion, compared with N75.4 billion recorded in the first half of 2025.

Oil and gas insurance is projected to emerge as the largest revenue contributor with N28 billion in premiums, slightly ahead of motor insurance estimated at N27.2 billion, while fire insurance is expected to generate about N18.1 billion, with other product segments accounting for the balance.

Rising premium income is, however, expected to drive higher operating costs within the insurance business. Insurance service expenses are projected at N62.7 billion, while reinsurance expenses are estimated at N17.1 billion.

Despite the higher cost profile, the insurer expects to post an insurance service result of N22.5 billion, an improvement on the N15.04 billion recorded in the same period of 2025, indicating stronger underwriting performance.

Investment income is also expected to support earnings, with dividend income projected to increase to N839.6 million from N626.9 million recorded in 2025.

However, the company anticipates a foreign exchange loss of about N591.6 million during the period, compared with no FX loss reported in the previous year, reflecting the lingering pressure from currency volatility.

Other operating expenses are estimated at N7.2 billion, while finance costs of N38.8 million and credit loss allowances of N291.5 million are expected to moderate overall profitability, leaving forecast profit before tax at N22.2 billion.

The projected pre-tax profit represents a rise from the N17.9 billion recorded in the first half of 2025.

On the balance sheet, the company expects total assets to grow to N183.1 billion from N159.9 billion, while total liabilities are projected at N86.9 billion. Retained earnings are forecast to increase to N63.7 billion, reflecting improved profitability and earnings retention.

The positive earnings outlook comes amid strong investor appetite for the insurer’s shares on the Nigerian equities market. NEM Insurance has delivered a year-to-date return of more than 26 per cent in 2026, extending the momentum from its strong performance in 2025.

Last year, the stock returned over 144 per cent to investors, supported by robust trading activity that saw about 248 million shares exchanged on the market.

The rally has continued into 2026, with the stock breaking a key resistance level of N31.20 in January, a mark that had held since August 2025, before closing the month at N32 per share.

So far this year, the share price has climbed to around N34, with trading activity already exceeding 100 million shares exchanged year-to-date.

NEM Insurance has maintained a consistent performance trajectory in recent years and has not recorded a negative annual return since 2022, when the stock closed the year flat.

In the 2025 financial year, the insurer reported N96.8 billion in gross premiums, representing a 46.64 per cent increase, while direct claims paid to policyholders rose by 125.98 per cent to N20.5 billion, reflecting heightened underwriting activity and expanded coverage across its portfolio.