GCR Upgrades NEM Insurance to AA+ with Stable Outlook
GCR Ratings has upgraded NEM Insurance Plc’s national scale financial strength rating to AA+ (NG), citing “sustained competitive strength” in the non-life market.
The agency, in a statement on Monday, said the move reflected NEM’s solid financial profile, supported by “robust risk-adjusted capitalisation, adequate liquidity and good earnings capacity.”
It noted that NEM “remains a leading insurer” with an estimated 10 per cent non-life market share in 2024.
NEM’s insurance revenue grew by 88 per cent to N98 billion in 2024, driven by its strong brand, long track record and firm broker relationships.
GCR said the firm’s revenue base was well diversified, with four of eight business lines each contributing over 10 per cent of insurance income.
It added that NEM was expected to maintain its leading non-life position, while its planned move into life insurance could support diversification.
NEM’s earnings profile was described as sound, strengthened by revenue growth, profitable underwriting and strong investment income.
GCR said the net incurred loss ratio improved, helping normalise the combined ratio to 86.6 per cent in 2024, a level it said compared well with peers.
It noted that investment yield stood at 18.9 per cent, supported by high exposure to fixed income securities in a high-interest environment.
Profit after tax rose by 125.8 per cent to N29.9 billion in 2024, translating to a return on revenue of 43.1 per cent, according to the agency.
GCR highlighted risk-adjusted capitalisation as a major strength, with the capital adequacy ratio rising to 2.4x at the end of 2024.
It said NEM’s statutory solvency margin reached 19.3x, well above the regulatory minimum of 1x. The agency expects the capital adequacy ratio to remain within 1.7x to 2.0x over the next 18 months.
GCR also assessed liquidity as positive, citing a liquidity coverage of 1.8x, supported by sizeable investments in liquid securities and deposits.
It projected that liquidity would stay above 1.5x, assuming no major strains from expansion plans. GCR said the stable outlook reflected expectations that NEM would sustain its market position through expansion and diversification.
It added that capital and liquidity ratios were expected to remain above 1.7x and 1.5x, though earnings might moderate due to onboarding costs.
NEM’s Managing Director, Andrew Ikekhua, said the upgrade affirmed the firm’s strategic underwriting and consistent profitability.
He said the company would continue providing “robust insurance services” to customers in line with its values and long-term vision.
Ikekhua was recently named among Nigeria’s Top 25 CEOs, recognised for corporate leadership at an awards event in Lagos.
NEM also won “General Insurance Company of the Year” at the 2025 Almond Insurance Industry Awards.
The firm further secured the Sectoral Leadership Award in the Financial Services Insurance category at the 2025 Pearl Awards.
