NEM Insurance Plc

What NEM Insurance Plc does

NEM Insurance underwrites general insurance risks across motor (compulsory third-party and comprehensive), property (fire and special perils), marine cargo and hull, engineering and construction risks, oil and gas upstream and downstream risks, employers' liability, and bond and financial guarantee insurance. The NEM Re subsidiary writes inward reinsurance from primary insurers across Nigeria and other African markets — accepting a portion of risks that primary insurers seek to lay off. Investment income from the group's bond and equity portfolio contributes to overall group earnings alongside underwriting results.

Risks to understand before buying shares

• Underwriting risk: large losses in motor, oil and gas, or property classes can exceed premium income in adverse periods. A single large oil and gas or property claim can materially affect annual results.
• Reinsurance credit risk: NEM Re and NEM Insurance itself rely on reinsurers to absorb large or catastrophic losses. Default by a reinsurer on a claim payment is a risk, particularly for smaller or less-rated reinsurers.
• Regulatory capital risk: NAICOM periodically revises minimum capital requirements. Capital shortfalls require rights issues or retained earnings, which can limit dividend availability.
• Investment portfolio risk: bond and equity investments backing insurance liabilities are subject to market risk and credit events.
• The value of shares can rise or fall. Past performance of NEM is not a guide to future returns.