NEM Insurance Plc increased its nine-month profit by 30.5 percent to N26.77 billion in 2026, as stronger underwriting results and investment gains offset a deterioration in operating cash flow, revealing a gap between accounting earnings and cash generated by its insurance business.

The insurer’s unaudited results for the nine months ended September 30 showed insurance revenue rising 7.7 percent year-on-year to N115.69 billion from N107.44 billion. More importantly, insurance service expenses fell 6.2 percent to N63.49 billion, from N67.66 billion, showing cost discipline and lifting the insurance service result by 22.1 percent to N20.81 billion.

However, the cost of reinsurance grew 38.1 percent to N31.39 billion from N22.73 billion, absorbing part of the improvement.

Investment income provided another earnings boost. Net investment results increased 37.2 percent to N19.03 billion from N13.87 billion, supported by fair-value gains that nearly doubled to N12.70 billion from N6.55 billion. But foreign-exchange losses widened to N3.61 billion from N974.5 million, highlighting the volatility within investment returns.

Profit before tax consequently climbed 30.5 percent to N31.02 billion from N23.77 billion in 2025, while profit after tax rose from N20.51 billion to N26.77 billion. The earnings improvement was driven by both underwriting recovery and investment performance, rather than revenue growth alone.

The balance sheet strengthened alongside earnings. Total assets increased 23.4 percent to N204.22 billion from N165.46 billion in September 2025, while shareholders’ equity expanded 27.5 percent to N103.26 billion from N80.97 billion and liabilities increased to N100.96 billion from N84.49 billion in 2025.

Financial investments across fair-value and amortised-cost categories reached approximately N128.07 billion, up from N95.16 billion a year earlier.

Cash generation is the big flag in the cash flow statement. Net operating cash flow swung from an inflow of N10.35 billion in the first nine months of 2025 to an outflow of N1.06 billion in 2026.

Premium receipts declined 7.9 percent to N112.54 billion, while direct claims paid increased 29.1 percent to N39.43 billion. Management expenses paid also rose sharply to N14.40 billion from N7.95 billion.

After investing and financing outflows, total cash declined by N15.36 billion during the period, although closing cash of N12.25 billion remained above the N8.06 billion recorded in September 2025.

NEM shares are currently trading at N27.50, giving the company a market capitalisation of N138 billion. The stock has returned 2.61 percent year-to-date on the NGX.