The Nigerian stock market’s insurance sector is experiencing its strongest rally in nearly two decades, as investors flood into insurance equities following the signing of the Nigerian Insurance Industry Reform Act (NIIRA) 2025 into law by President Bola Ahmed Tinubu.
Market analysts say the sweeping reforms introduced by the NIIRA have triggered a wave of optimism, pushing the NGX Insurance Index up by 91.41% year-to-date—more than double the 40.80% gain of the All Share Index (ASI). Since the Act came into effect earlier this month, the index has soared 54.28%, reflecting intense investor appetite for the sector’s newly unlocked growth potential.
The NIIRA 2025 consolidates and repeals outdated insurance laws, creating a modern, transparent, and globally competitive legal framework for the Nigerian insurance and reinsurance market.
Key features include:
Tougher capital requirements to ensure financial stability of operators.
Enforcement of compulsory insurance policies to boost penetration and consumer protection.
Digitisation of the insurance market for improved efficiency and wider access.
Policyholder protection funds to safeguard clients in cases of insolvency.
Strict claims settlement timelines to end chronic payment delays.
Regional integration measures such as expanded participation in the ECOWAS Brown Card Scheme.
Market research firm CardinalStone notes that the reforms will “spark sector-wide recapitalisation, enhance governance standards, and create structural growth opportunities,” particularly for well-capitalised insurers with strong earnings profiles.
A review of the 15 most capitalised and liquid insurance companies on the NGX shows stellar performance for nearly all—except Sunu Assurances, which has suffered a 48.84% decline.
Top gainers include:
NEM Insurance: +228.77%
Mutual Benefits: +426.23%
AIICO Insurance: +169.23%
Sovereign Trust Insurance: +166.9%
Royal Exchange: +162%
Cornerstone Insurance: +95.83%
AXA Mansard: +96.34%
Analysts say AIICO stands out due to its largest asset base in the sector, a 34% year-on-year increase in insurance service revenue, and a 49.7% boost in investment income for the first half of 2025.
The NIIRA’s recapitalisation directive could reshape the sector’s competitive landscape. Smaller players may struggle to meet new thresholds, prompting a likely wave of mergers and acquisitions.
According to CardinalStone’s August sector update, insurers will have 12 months from the Act’s commencement to comply with capital requirements, though further guidelines on qualifying capital and transitional provisions are expected from the National Insurance Commission (NAICOM).
“Industry consolidation is inevitable,” said Vetiva Capital Management in a research note, “but the larger, better-run insurers are well-positioned to capture market share and attract foreign capital.”
The Federal Government sees NIIRA 2025 as a key pillar in its ambition to transform Nigeria into a $1 trillion economy. Higher capitalisation, better governance, and compulsory coverage could expand insurance penetration—currently under 1%—toward levels seen in emerging market peers.
NAICOM is tasked with driving implementation, unlocking the sector’s full potential, and positioning Nigeria as West Africa’s leading insurance hub.
Lagos-based analysts at United Capital expect the rally to continue in the medium term, with “continued rotation into fundamentally strong financial stocks, particularly insurers and banks,” thanks to resilient earnings and attractive valuations.
However, market watchers caution that valuations are now stretched after the sharp rally, advising tactical buying on dips.
As the NIIRA begins to reshape the market, investors are betting big on insurance stocks not just as a short-term trade, but as a cornerstone of Nigeria’s evolving financial system.