NEM Insurance Plc is projecting a profit after tax of ₦19.7 billion for the first half of 2026, translating to earnings per share of ₦3.95, as the insurer’s oil and gas portfolio overtakes motor insurance as the largest revenue contributor for the first time, a shift driven by sustained energy market volatility and aggressive portfolio diversification.

The projection represents a 28% increase from the ₦15.4 billion profit recorded in H1 2025, which itself marked growth from ₦10.6 billion posted in H1 2024.

The strong performance is expected to be underpinned by insurance revenue of ₦102.4 billion, up 36% from ₦75.4 billion reported in the first half of 2025.

Sectoral contributions are anticipated to come primarily from oil and gas insurance at ₦28 billion, narrowly edging out motor insurance at ₦27.2 billion, with fire insurance contributing ₦18.1 billion and other product lines accounting for the balance.

The oil and gas segment’s rise to the top spot reflects both increased demand for energy risk coverage amid geopolitical tensions and NEM’s strategic positioning in Nigeria’s upstream, midstream, and downstream energy sectors.

The shift is significant. Motor insurance has historically dominated Nigeria’s non-life insurance market, but rising energy prices, infrastructure expansion, and heightened security concerns around oil and gas assets have created a surge in demand for specialised energy risk products.

NEM Insurance has capitalised on this trend, building technical capacity and deepening relationships with multinational energy operators.

NEM Insurance has delivered a year-to-date return of over 26% on the Nigerian equities market in 2026, extending the momentum built during its standout 2025 performance. Last year, the stock returned over 144% to investors, supported by robust trading activity with approximately 248 million shares exchanged.

The momentum carried into 2026, with the stock breaking a key technical resistance level of ₦31.20 in January, a mark that had held since August 2025 before closing the month at ₦32 per share.

So far in 2026, the share price has climbed to around ₦34, with trading activity already exceeding 100 million shares year-to-date.

NEM Insurance has not recorded a negative year since 2022, when the stock closed flat. The consistent upward trajectory reflects improving fundamentals, stronger underwriting discipline, and growing investor confidence in the insurer’s ability to navigate Nigeria’s volatile macroeconomic environment.

While revenue growth is strong, the projected revenue increase is expected to drive higher insurance service expenses, forecast at ₦62.7 billion, alongside reinsurance expenses of ₦17.1 billion, resulting in an insurance service result of ₦22.5 billion.

The rising cost base reflects both higher claims from heightened underwriting activity and increased reinsurance costs as global reinsurers tighten pricing in response to elevated catastrophe losses worldwide.

In full-year 2025, NEM Insurance recorded ₦96.8 billion in gross premiums, a 46.6% increase year-on-year, while direct claims paid surged 125.98% to ₦20.5 billion, reflecting heightened underwriting activity and a more aggressive claims settlement posture. The company posted ₦27.9 billion in pre-tax profit for FY2025, demonstrating resilience despite cost pressures.

NEM Insurance has expanded its portfolio by launching NEM Health Limited, which commenced operations in 2023, positioning the group to capture growth in Nigeria’s underserved health insurance market.

The company also continues to strengthen its position in fire, marine, aviation, and general accident lines, diversifying revenue sources beyond the traditional motor and oil and gas segments.

The insurer’s Managing Director, Andrew Ikekhua, was recognised as one of Nigeria’s Top 25 Chief Executive Officers at the BusinessDay Top 25 CEOs Awards in 2025, reflecting industry recognition of NEM’s strategic execution and financial performance.

Investors will be watching whether NEM can sustain its growth trajectory while managing cost inflation, particularly as claims continue to rise in line with premium expansion.

The oil and gas segment’s performance will be critical, especially as geopolitical tensions in the Middle East sustain elevated energy prices and increase demand for risk coverage.

The H1 2026 results, expected in the coming months, will reveal whether NEM’s aggressive growth strategy can translate into sustained profitability or whether rising claims and reinsurance costs will compress margins and slow the momentum that has driven the stock to multi-year highs.

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