Despite the successful conclusion of the recapitalisation exercise in Nigeria’s insurance industry, the share prices of listed firms in the sector have continued to struggle, leaving the sector with a -9.23 per cent year-to-date (YTD) return.

Data from the Nigerian Exchange Limited (NGX) on the performance of the six major sectoral indices as of August 27, 2026, showed that the insurance index was the only sector in negative territory, despite a strong rally across the broader market.

The NGX All-Share Index (ASI) returned 55.05 per cent during the period, while the oil and gas index emerged as the best-performing sector, with a gain of 94.19 per cent.

The industrial goods index followed with a return of 82.84 per cent, while the banking index gained 67.89 per cent. The consumer goods index recorded a marginal gain of 0.94 per cent.

The poor performance of insurance stocks represents a sharp reversal for a sector that ranked among the strongest performers on the NGX in recent years.

For instance, the insurance index returned 107.74 per cent in 2024, making it the second-best-performing sector after oil and gas, which gained 159.81 per cent. The sector also sustained investors’ interest in 2025 as expectations of regulatory reforms boosted demand for its shares.

However, the momentum has weakened significantly in 2026, despite expectations that the recapitalisation exercise would strengthen industry operators, improve their capacity to underwrite larger risks and boost investor confidence.

Stockbrokers attributed the sustained apathy towards insurance stocks to poor dividend payments, concerns over claims settlement and uncertainty about how companies will deploy their additional capital to improve earnings and shareholder returns.

They noted that the negative attitude of many Nigerians towards insurance, partly due to complaints over delayed or unpaid claims, has continued to affect confidence in the sector. The poor dividend history of several insurance companies has also made their shares less attractive to investors.

Executive Director of Halo Capital Management Limited, Dr Paul Uzum, linked the weak performance of insurance stocks to poor dividend returns, investors’ concerns about the sector and the limited appetite for fresh capital raising.

He noted that many insurance companies did not raise new funds despite the recapitalisation deadline set by the National Insurance Commission, while the sector has continued to struggle to attract strong investor interest.

Uzum said even some of the leading insurance companies, including Custodian, Mansard, AIICO and NEM Insurance, have dividend yields of less than four per cent, while many other insurers do not pay dividends.

He added that the revocation of the operating licence of Universal Insurance also created negative sentiment around the sector, raising concerns among investors about the safety of their investments.

The recapitalisation process had compelled several operators to strengthen their capital base, restructure their operations and explore mergers and acquisitions. However, investors remain concerned about the possible impact of fresh equity issues on their existing holdings.

Concerns about dilution have also made some investors cautious, particularly in companies that may still need to return to the market to raise additional capital.

The weak performance of insurance stocks is also reflected in the half-year financial results released by some operators.

Cornerstone Insurance Plc recorded insurance revenue of N29.01 billion for the half-year ended June 30, 2026, representing an increase of 18.56 per cent from N24.47 billion recorded in the corresponding period of 2025.

However, profitability came under pressure, with profit before tax declining by 18.1 per cent to N6.12 billion, while profit after tax fell by 21.78 per cent to N5.26 billion.

Data from NGX indicated that the company’s share price has also stagnated, declining by 11.9 per cent as of the close of trading on Monday, August 31, 2026, to N5.25 from N5.96 recorded at the beginning of the year on January 2, 2026.

Similarly, Sovereign Trust Insurance Plc dropped 50.66 per cent year-to-date, falling from N3.81 at the beginning of trading on January 2, 2026, to N1.88 as of August 31.

Mutual Benefits Assurance, however, achieved a marginal year-to-date gain. The stock closed at N3.20 and has gained 1.61 per cent from its opening price of N3.10 at the beginning of the year.

A former president of the Ibadan Zone Shareholders Association of Nigeria, Eric Akinduro, said the recapitalisation exercise had strengthened the capital base of insurance operators but had yet to translate into improved share prices and stronger investor confidence.

He noted that investors were looking beyond the volume of capital raised by insurance companies and were waiting to see evidence that the funds would improve earnings, returns and overall shareholder value.

According to him, raising fresh capital alone does not guarantee profitability, as investors will assess the success of the exercise based on its impact on earnings per share, return on equity, dividend capacity and sustainable profitability.

He added that concerns about the dilution of existing shareholders following new share issues, weak dividend history and pending regulatory decisions may also be making investors cautious.

Akinduro said investors want to see stronger underwriting performance, improved claims management, better cost efficiency and sustainable investment income before placing greater value on insurance stocks.