NEM Insurance, an underwriting firm in Nigeria, has recorded an 86 percent revenue increase in 2024 driven by non-life insurance income from oil and gas, motor and fire insurance.
According to the company’s unaudited financial results, revenue surged to N97.1 billion from N51.9 billion in 2023.
Unlike life insurance, which covers lives for assured benefits, non-life insurance provides coverage for damages on an indemnity basis.
However, an insurance company generates revenue from non-life insurance through premiums paid by policyholders for policies that do not provide a payout in the event of the policyholder’s death.
In 2024, motor insurance recorded a 51 percent year-on-year growth to N24.6 billion from N16.3 billion, contributing 25 percent of total insurance revenue.
Oil and gas insurance grew by 183 percent to N30.9 billion from N10.9 billion, contributing 32 percent to total insurance revenue while fire insurance grew by 46 percent to N16.9 billion from N11.6 billion, adding 17 percent to total revenue in 2024.
BusinessDay’s findings show that an increase in non-life insurance income indicates that NEM Insurance generated more premiums paid from policy holders under specific insurance policies, strong underwriting performance, and a balanced risk distribution in high-premium sectors in 2024.
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At the full-year ending of 2024, NEM Insurance recorded a 76 percent increase in pre-tax profit to N27 billion from N19.2 billion while after-tax profit grew by 75.9 percent to N23.3 billion from N13.3 billion in 2023, reflecting an improved cost on operations.
Despite this growth, the insurer recorded a 79 percent surge in insurance expenses by incurring N26.7 billion in claims in 2024 from N14.9 billion in 2023.
NEM Insurance reported a 150.7 percent increase in investment income to N6.6 billion from N2.6 billion while its net investment result declined by 13.6 percent to N16.7 billion due to a decrease in net foreign exchange and fair value gain.
“Net foreign exchange gain declined by 31.9 percent to N7.7 billion from N11.4 billion while net fair value gain stood at N1.8 billion,” the report said.
Additionally, the company has expanded its portfolio by introducing NEM Health Limited, which commenced operations in 2023.
While its impact on 2024 performance appears minimal, it is expected to contribute more meaningfully in 2025, reinforcing NEM’s commitment to diversification and long-term growth.
NEM Insurance has projected a pre-tax profit of N8.323 billion and post-tax profit of N7.158 billion for Q1 2025, representing a decline from Q4 2024 pre-tax profit of N11.306 billion and post-tax profit of N9.757 billion.
However, the Q1 2025 forecast accounts for about 31 percent of the company’s full-year 2024 pre-tax and post-tax profits. Ahead of the Q1 2025 results release, investors are closely on track for relevant updates and trends to optimise their investment decisions.
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