By Bakare Ogunleye
Shares of insurance companies listed on the Nigerian Exchange Limited (NGX) are
battling low demand and investor apathy, as returns, weak market sentiment, and structural industry challenges continue to weigh heavily on the industry’s attractiveness.
Despite modest growth in premium income and claims settlement, insurance stocks remain largely illiquid, undervalued, and among the least traded on the exchange, raising concerns about the long-term viability of the sector’s capital market presence.
Observers in the market said that the persistent bearish sentiment around insurance stocks stems from structural issues within the industry.
Speaking on the development at the weekend, a shareholder of popular insurance firm, Adebayo Ogunleye, said that as much as insurance is crucial to economic growth, investors have not seen strong fundamentals or corporate governance that will inspire long-term investment.
He noted that many of the firms are trading below par value, with limited liquidity and poor dividend history.
According to the data from the NGX, most insurance stocks trade below N1 per share, with little daily turnover, reflecting low investors’ appetite. The insurance index has consistently lagged behind other sectoral indices such as banking, consumer goods, and industrials.
Market analysts noted that despite recent improvements in gross premium income and claims payment by several insurers, this has yet to translate into improved share performance or investor interest.
In addition, the capital market has yet to fully absorb the impact of ongoing regulatory reforms led by the National Insurance Commission (NAICOM), particularly those around risk-based supervision and capital restructuring. The delayed implementation of the insurance recapitalization plan has also contributed to the sector’s stagnant stock market performance.
Some investors have called for deeper reforms, better transparency, and stronger enforcement of market disclosures to restore confidence.
“Insurance companies need to show stronger financial results, engage in aggressive investor relations, and improve their corporate governance practices,” said Uche Nwosu, an institutional investor. “Until then, it will be difficult for the market to reprice these stocks fairly,” potential, especially in Nigeria’s underserved retail and informal markets.
For now, however, insurance shares remain some of the least active and most difficult to sell on the Nigerian capital market, leaving investors cautious and watchful.
