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SUNU Assurances Nigeria Plc is banking on surging premiums and fresh capital injection to bolster profitability this year, even as foreign-exchange losses and rising costs weigh on the broader insurance industry.
The Lagos-based insurer projects that its net income will rise 17 percent to N1.56 billion ($1 billion) in 2025, from N1.33 billion in 2024, according to its earnings forecast. Profit before tax is expected to reach N2.33 billion, underpinned by stronger underwriting performance and steady investment income.
Gross premium written is forecast to climb 33 percent to N17.31 billion, one of the sharpest increases in recent years. Insurance revenue is projected at N16.41 billion, representing an 18.8 percent increase from the previous nine months, reflecting both pricing strength and a wider customer reach.
Investment income, projected at N1.51 billion, will be driven by placements with banks, treasury bills, and statutory deposits with the central bank at average yields of 9 percent to 15 percent.
The gains come as Nigeria’s insurers face stiff headwinds from inflation, which averaged more than 23 percent in mid-2025, and naira volatility. SUNU anticipates foreign-exchange losses of N244 million, while operating expenses are projected to increase to N3.84 billion, squeezing margins. Insurance service expenses, largely claims-related, are forecast at N8.69 billion, up from the prior year.
Read also: SUNU Assurances posts N3.87bn profit, Pays N3.28bn in claims for 2024
Cashflow pressures, capital injection
SUNU’s cash flow forecast highlights underlying liquidity strains. Operating inflows are expected to barely stay positive at N43.5 million, as higher commission payments (N4.49 billion) and reinsurance premiums (N4.26 billion) offset cash received from policyholders. Direct claims payments are projected at N3.45 billion, reflecting the company’s higher exposure to retail and general business lines.
To shore up its balance sheet, SUNU plans a N7 billion equity capital increase in 2025. That boost, combined with retained earnings, is expected to lift cash and cash equivalents to N17.47 billion, from N11.71 billion at the start of the year.
The move mirrors a wider industry trend, as insurers race to meet regulatory requirements and expand capacity to underwrite bigger risks in oil, infrastructure, and health sectors.
Peer comparisons
SUNU’s growth outlook stands out in a sector where profitability remains patchy. AIICO Insurance Plc, for instance, forecasted more moderate premium growth but stronger investment returns, leveraging its asset-management arm.
AXA Mansard, backed by French parent AXA, continues to diversify into health insurance and asset management, giving it more earnings stability. By contrast, SUNU remains more dependent on core insurance operations, leaving it more exposed to claims volatility and currency swings.
Yet, SUNU’s strategy of aggressively expanding gross premiums aligns with moves by smaller players seeking to gain market share as industry penetration remains below 1 percent of GDP.
Analysts say sustaining double-digit growth while managing claims and expenses will determine whether the company can deliver on its forecast.
Industry outlook
Nigeria’s insurance sector, though still nascent, is drawing renewed investor interest. Rising awareness of health and life products, regulatory enforcement on compulsory insurance, and partnerships with fintechs are expected to expand the customer base. But profitability remains challenged by macroeconomic instability, foreign-exchange shortages, and the sector’s heavy reliance on reinsurance.
For SUNU, the ability to execute its premium growth plans while preserving liquidity may define 2025. “The capital raise is crucial,” said a Lagos-based insurance analyst not involved in the forecast. “It provides the buffer needed to navigate Nigeria’s volatile operating environment.”
As the company heads into the year with higher cash reserves and an expanded underwriting base, investors will be watching whether those buffers translate into stronger returns in an industry where growth is often overshadowed by risk.
