With a stunning 41% growth in one week—its best performance in months—the Nigerian insurance industry has dominated the Nigerian Exchange Limited (NGX).
Huge pricing increases in the main sector players pushed this surge; Mutual Benefits Assurance, AIICO Insurance, Royal Exchange Insurance, Sovereign Trust Insurance, and Cornerstone Insurance Plc all had remarkable rebounds.
The recent enactment of the New Insurance Act, which has lifted investor confidence in the industry, provided the stimulus for this amazing momentum. The legislation is predicted to bring about major changes that include recapitalisation requirements and more stringent regulatory standards that might raise compliance rates, increase operating efficiency, and raise long-term profitability.
Looking closely at last week’s results reveals Mutual Benefits Assurance leading with a remarkable 60 percent price increase. With a 59.8 percent increase, AIICO Insurance followed closely; Royal Exchange posted 59.3 percent; Sovereign Trust Insurance advanced 59.1 percent; and Cornerstone Insurance gained 54.5 percent.
The News Chronicles confirms that this renewed enthusiasm stems not only from policy reforms but also from growing expectations of capital appreciation in the months ahead. Many analysts believe that with stronger balance sheets and better oversight, the insurance industry could attract both domestic and foreign investors looking for stable, undervalued opportunities.
Outside the insurance industry, the industrial index increased 8.73 percent, mostly driven by robust performances from cement heavyweights BUA Cement and Dangote Cement, which grew 13.9 percent and 9.2 percent, respectively. Backed by advances in BUA Foods, Guinness Nigeria, and Ellah Lakes, the consumer goods index followed tightly with an 8.3 percent weekly increase.
Meanwhile, the oil and gas industry saw just a slight 0.17 percent rise, mostly thanks to little gains by Oando and Japaul Gold & Ventures. On the other hand, losses in Total and Presco brought the commodities index down 2.33% .As investors booked gains from major names including Zenith Bank, Fidelity Bank, and Access Holdings, the banking industry also saw a modest 0.75% decrease.
For investors, the insurance industry’s quick rise points to a possible inflection point. Should the expected reforms result in better fundamentals, the momentum could stretch beyond a brief spike and signal the start of a new growth stage for one of Nigeria’s most underappreciated sectors.
