Despite inflationary pressures, foreign exchange volatility, and rising energy costs, insurers in Africa’s most populous nation have shown resilience as they maintained healthy underwriting margins, with their combined ratios below 100 percent meaning they are collecting more in premiums than they are paying out in claims and expenses.
The average combined ratio (CR) of largest and most capitalised insurers stood at 86.88 percent in the first three months of 2026, from 74.27 percent as at March 2025, according to data gathered by MoneyCentral.
Combined ratio explanation
The combined ratio is a measure of profitability used by an insurance company to gauge how well it is performing in its daily operations. A ratio below 100 percent indicates that the company is generating an underwriting profit, while a ratio above 100 percent means that it is paying out more money in claims than it is receiving in premiums.
It is important to note that insurers recorded a strong underwriting margin amid a tough and unpredictable macroeconomic environment even as there are growing optimism that the transformative policies of the current administration is going to unlock the potentials in the economy.
Individual insurer performance (Q1 2026)
| Insurer | CR Q1 2026 | CR Q1 2025 | Change | Profitability Status |
|---|---|---|---|---|
| Lasaco Assurance Plc | 54.80% | 81.60% | -26.80% | Strong underwriting profit |
| NEM Insurance | 79.10% | 76.60% | +2.50% | Underwriting profit |
| Coronation Insurance Plc | 83.20% | 79.80% | +3.40% | Underwriting profit |
| AXA Mansard | 86.00% | — | — | Underwriting profit |
| Prestige Assurance | 87.90% | 93.20% | -5.30% | Underwriting profit |
| AIICO Insurance | 88.59% | — | — | Underwriting profit |
| Mutual Benefit Assurance | 100.63% | — | — | Underwriting loss |
| International Energy Insurance | 104.40% | — | — | Underwriting loss |
| Guinea Insurance | 114.20% | 32.40% | +81.80% | Significant underwriting loss |
As a result of claims inflation, the replacement cost of assets for companies have risen on the back of the sharp depreciation of the currency, but this increment has been offset by premium growth and investment income. Some insurers trade in treasuries or government bond so as to earn a high return.
Nigeria’s headline inflation now stands at 15.69 per cent as of April 2026, according to the latest consumer price index (CPI) released by the National Bureau of Statistics (NBS).
According to the central bank, United States’ dollar (USD)/Naira (NGN) traded within the range of 1,360.00/US$-1,363.50/US$ and depreciated by 0.11 percent to close at 1,362.05/US$ at the NFEM window. Furthermore, the gross external reserves increased by 0.16 percent to close at $50.35 billion as of 9th June 2026.
According to the National Bureau of Statistics (NBS), the Nigerian economy grew by 3.89 percent year on year (yoy) in real terms in first quarter (Q1)-26.
As of mid-2026, Nigeria’s insurance penetration—measured as the ratio of insurance premiums to Gross Domestic Product (GDP)—remains below 1 percent.
The costs of running generator plants as well as fuel and maintenance expenses at head and branch offices across the country have added strength to bloated operating expenses.
Analyst view
Nigeria’s insurers recorded healthy underwriting margins with an average combined ratio of 86.88% in Q1 2026, despite the 12.61 percentage-point deterioration from 74.27% in Q1 2025. The ratio remains well below the 100% breakeven threshold, indicating the sector’s resilience amid 15.69% inflation, FX volatility, and rising energy costs.
Lasaco Assurance Plc demonstrated the most significant improvement, with CR straightening to 54.80% from 81.60%, a 26.80 percentage-point improvement highlighting improved underwriting discipline and operational refinement. This best-in-class performance positions Lasaco as the sector’s most profitable insurer on an underwriting basis.
AXA Mansard’s 86% CR and AIICO Insurance’s 88.59% CR indicate strong underwriting profitability, with both companies spending approximately N86-N88.59 on claims and reinsurance for every N100 of insurance revenue earned. NEM Insurance’s 79.10% CR, despite a 2.50 percentage-point increase from 76.60%, continues to generate profit from core operations.
Prestige Assurance’s resilience with CR improving to 87.90% from 93.20% demonstrates the company’s ability to tighten underwriting discipline despite macroeconomic pressures. The 5.30 percentage-point improvement suggests effective claims management and premium pricing strategies.
However, some insurers face significant challenges. Guinea Insurance’s CR moved to 114.20% from 32.40%, an 81.80 percentage-point deterioration due to an underwriting loss incurred on the back of high claims payment as the company prioritizes customer confidence. International Energy Insurance’s 104.40% CR raises concerns about underwriting efficiency, as the company pays more operating and claims expenses than it generates in revenue.
Mutual Benefit Assurance’s 100.63% CR indicates the company spent approximately N100.63 on claims and reinsurance obligations for every N100 of insurance revenue, leaving minimal underwriting profit. This near-breakeven performance suggests the company is vulnerable to further claims inflation or premium pressure.
Claims inflation driven by the sharp currency depreciation has raised replacement costs for assets, but this increment has been offset by premium growth and investment income. Some insurers trading in treasuries or government bonds earn high returns, helping to mitigate operating expense pressures from generator plants, fuel, and maintenance costs at head and branch offices.
The sector’s below-1% insurance penetration rate remains a significant growth opportunity, with the transformative policies of the current administration expected to unlock economic potentials. As GDP grew 3.89% YoY in Q1 2026 and external reserves increased to $50.35 billion, the macroeconomic environment may stabilize, supporting premium growth and underwriting profitability.
Investors should favor insurers with strong underwriting discipline like Lasaco, AXA Mansard, AIICO, and NEM Insurance, while monitoring Guinea Insurance and IEI for potential underwriting efficiency improvements. The sector’s ability to maintain combined ratios below 100% amid 15.69% inflation and FX volatility demonstrates operational resilience that could support long-term value creation as insurance penetration expands.
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