…AIICO, AXA Mansard, Others Pay Over N255bn Claims
…Rising Claims Swallow 50% Of Insurers’ Total Revenue
Leading Nigerian insurers paid a combined N254.96bn in claims in the 2025 financial year, marking a 24.23 per cent increase from the N205.23bn recorded in 2024, underscoring mounting pressures on the industry amid worsening economic conditions.
The sharp rise in claims highlights a growing strain on insurers’ profitability, even as the sector recorded strong revenue growth.
Data compiled from the audited financial statements by THE WHISTLER of major listed firms AIICO Insurance, Prestige Assurance Plc, NEM Insurance Plc, AXA Mansard Insurance Plc and Consolidated Hallmark Insurance Plc, show that total revenues rose by 33.95 per cent to N518.37bn in 2025, up from N387bn in the previous year.
Despite this growth, nearly half of the total revenue, 49.18 per cent, was paid out as claims, reflecting the increasing cost burden on operators.
Industry analysts attribute the surge in claims to a combination of macroeconomic challenges, including inflation, currency depreciation, high energy costs, and rising insecurity, all of which have heightened risk exposure and claim incidents across the country.
Data from the National Insurance Commission (NAICOM) corroborates this trend, showing that total industry claims rose to N724.7bn in 2025, representing about 31.5 per cent of gross premiums written.
The regulator also reported a strong settlement rate of 88.5 per cent, indicating that insurers have largely maintained their capacity to meet obligations despite the challenging environment.
NAICOM noted that the simultaneous rise in premiums and claims reflects deeper insurance penetration and increased market activity rather than isolated shocks. The regulator attributed the growth to ongoing reforms aimed at strengthening pricing discipline and expanding market reach.
However, stakeholders warn that the rising claims profile, combined with escalating operating costs, is beginning to erode profitability across the sector.
An insurance broker, John Chikelue, in an exclusive chat with THE WHISTLER, said higher claims payouts and operating expenses inevitably reduce profit margins, as these costs are deducted from insurers’ income.
He emphasised that while claims payment remains the core obligation of insurance companies, operators must explore alternative revenue sources and expand market penetration to sustain growth.
“With Nigeria’s large population and low insurance density, there is still a significant untapped market. Expanding coverage will positively impact operations,” he said, adding that improved risk management practices and stronger underwriting discipline could help reduce claims frequency.
Similarly, former Secretary General of the African Insurance Organisation, Prisca Soares, noted that rising operational costs including labour, utilities, and services, are significantly impacting insurers’ bottom lines.
“Even where premiums have increased, higher expenses and claims payments are eroding profits. Companies must find ways to cut costs to remain profitable,” she said.
Also commenting, Managing Director of Tangerine General Insurance Plc, Mayowa Adeduro, linked the surge in claims to economic hardship, which he said has weakened maintenance culture and increased risk exposure.
According to him, inflation and exchange rate volatility have raised the cost of repairs and replacements, while reduced disposable income has made policyholders more likely to file claims, even for minor incidents.
He also pointed to a rise in fraudulent claims, driven by economic desperation, as well as increasing incidents of theft, accidents, and social vices.
“Poor maintenance of assets, rising insecurity, and even deliberate acts such as arson for insurance benefits are contributing to higher claims,” Adeduro said.
On her part, Director-General of the Nigerian Insurers Association, Bola Odukale, said the growing volume of claims reflects improved awareness and trust in insurance.
“Insurance companies are paying claims, and this is critical for building public confidence in the sector,” she said, noting that sustained engagement and education are needed to address longstanding gaps in awareness.
Echoing this view, former President of the Chartered Insurance Institute of Nigeria, Edwin Igbiti, said the increase in claims signals rising acceptance of insurance, although penetration remains low relative to the size of the economy.
Experts agree that while the upward trend in claims reflects positive growth in insurance adoption, it also underscores the urgent need for improved risk management, cost control, and market expansion strategies.
ENDS
