NEM Insurance Plc grew its profit after tax by 16.8 percent to N18.09 billion in the half year ended June 30, 2026, from N15.48 billion in the corresponding period of 2025, as a strong rebound in investment income and fair value gains cushioned a slower underwriting performance and rising insurance finance costs.
Insurance revenue declined 4.3 percent to N72.20 billion from N75.41 billion in H1 2025, a reversal from the growth trend seen in the company’s earlier quarters. Despite the softer top line, the insurance service result held up, edging up 3.6 percent to N15.59 billion from N15.05 billion, helped by a sharp drop in insurance service expenses to N33.12 billion from N43.40 billion, as claims and amortisation costs fell.
That improvement was partly offset by a jump in net expenses on reinsurance contracts, which rose 38.6 percent to N23.50 billion from N16.96 billion, reflecting higher reinsurance premiums ceded during the period.
The real driver of profit growth sat below the underwriting line. Net investment result climbed 49.7 percent to N12.01 billion from N8.02 billion, powered by a net fair value gain of N7.86 billion on quoted equities, up from N3.61 billion a year earlier, and higher interest revenue of N4.57 billion, from N3.79 billion.
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Profit before tax rose 16.9 percent to N20.96 billion from N17.94 billion, translating to the 16.8 percent rise in profit after tax.
Total assets grew 21 percent year-on-year to N193.67 billion, from N159.90 billion in H1 2025, led by a 27 percent rise in financial investments to N119.47 billion, from N94.42 billion, a direct reflection of the equity market gains flowing through the income statement.
One line item stands out as recapitalisation deadline is closer: statutory deposit with the CBN jumped to N1.50 billion from N320 million, a nearly five fold increase, consistent with insurers strengthening their regulatory capital position ahead of NAICOM’s July 31 recapitalisation deadline.
On liabilities, insurance contract liabilities rose 15.6 percent to N80.40 billion, from N69.50 billion in H1 2025, tracking growth in the underwriting book. Total equity grew 24.5 percent to N94.57 billion, from N75.93 billion, driven by retained earnings rising to N62.78 billion (from N49.40 billion) and the statutory contingency reserve increasing to N24.01 billion (from N18.75 billion), both reflecting the period’s strong profit performance.
According to the released H1 2026 financials, Net cash inflow from operating activities fell 72.9 percent to N2.38 billion from N8.78 billion in the prior year period. The decline was driven largely by a drop in premiums received, to N79.23 billion from N96.88 billion, alongside higher direct claims paid during the half.
Net cash used in investing activities more than doubled to N9.38 billion, from N4.46 billion, as the company ramped up placements and bond purchases. Financing outflows also rose to N7.66 billion, from N5.28 billion, largely on a higher dividend payment of N7.52 billion.
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Despite these swings, cash and cash equivalents at the end of the period still rose 9.6 percent year-on-year, to N12.95 billion from N11.82 billion in H1 2025.
NEM closed H1 2026 with an asset to liability ratio of 1.95x, a return on assets of 9 percent and a return on equity of 19 percent, all pointing to a well-cushioned balance sheet and strong shareholder returns for the half. The retuerns has been reflected on the NGX, where NEM shares currently trade at N32, up 19.4 percent year to date, giving the company a market capitalisation of N160.53 billion.