Insurance companies in Nigeria paid out N346.87 billion in claims during the first half of 2026, reflecting a slight increase of 0.1 percent compared to N346.59 billion in the same period last year. This rise in claims comes at a time when the industry is grappling with a 1.8 percent decline in Gross Premium Written (GPW), which fell to N579.25 billion from N590.2 billion in 2025.

The financial performance of 18 insurance firms listed on the Nigerian Exchange Limited (NGX) highlights a concerning trend: while claims obligations are on the rise, premium income is decreasing. Experts have expressed worries about the implications of this situation for the underwriting margins within the industry.

Mr. Olumide Fatogun, Managing Director of Boof Insurance Brokers, commented on the situation, noting that the data indicates a significant portion of premium income is being consumed by claims. He emphasized the necessity for insurers to enhance premium growth while exercising disciplined underwriting and claims management. This approach is crucial as the industry transitions into a post-recapitalisation phase, where stronger capital requirements are expected to bolster underwriting capacity and increase policyholder confidence.

The recapitalisation initiative has reportedly mobilised around N1.079 trillion, which includes both new capital and existing funds. This infusion of capital aims to strengthen the financial positions of insurance operators. However, as the sector moves forward, there are growing concerns regarding whether this new capital will effectively translate into improved underwriting capabilities, quicker claims settlements, and enhanced retention of domestic risks.

The ongoing challenges faced by the insurance sector underscore the need for a strategic focus on maintaining a balance between claims and premiums. If the trend of increasing claims continues while premium income remains stagnant, it could lead to significant challenges for insurers in the near future. The industry must adapt to these pressures to ensure sustainable growth and better service for policyholders.