Insurers Pay N266bn Claims As Gross Premium Rises By N298.5bn In Q1

The over 60 underwriting firms in the country paid total claims of N266 billion to policyholders who suffered insured risks in the first quarter of 2025 even as the industry recorded gross premium written (GPW) of N769.2 billion for both life and non-life businesses during the quarter.

The National Insurance Commission (NAICOM), in its latest Bulletin of the Insurance Market Performance for first quarter 2025, sourced by LEADERSHIP, revealed that the claims paid rose by N116.9 billion representing over 80 per cent growth from the N149.1 billion total claims paid in Q1 2024, indicating the effect of increased public awareness, growing confidence of stakeholders regarding claims settlement and redress mechanism reflected in the volume of gross claims reported.

During the period under review, Motor Insurance recorded the highest settlement ratio in the non-life segment of the market at 81.2 per cent, followed by Oil & Gas (74.9 per cent), General Accident (70.7 per cent), Fire (66.7 per cent), Miscellaneous (57.7 per cent), Fire (66.7 per cent) and, Marine & Aviation 24.6 per cent, reporting the least ratio of claims paid to reported claims.

Although the total claims represented about 35 per cent (34.6 per cent) of all the premiums generated during the same period, it was considered by analysts as a win-win situation for insurers and policyholders as it underpins the underwriting quality and market sustainability in the first quarter of the current year.

Similarly, aggregate net claims paid for both life and non-life insurance also stood at N167.3billion, signifying 62.8 per cent of all the claims reported during the period with the Life segment of the market  reporting about 67.1 per cent while the non-life segment recorded 60.1 per cent.

The proportion of net claims settlement against reported claims in the market, however, was moderate largely owing to issues of incomplete or delayed documentation of claims reports.

For most classes of insurance, the gross claims reported is not relatively too different from the net claims paid.

Meanwhile, the industry recorded a gross premium  of N769.2 billion for both life and non-life businesses during the quarter, the highest ever premium generation in a first quarter period of  any year. This is also an indication of the fulfilling potential of the market that has come of age, as the industry looks towards technology and the big-data driven policies for expansion.

Data collected during the period indicates a growth rate of 63.4 per cent, marking a substantial increase even at a period when the national output is still growing in a single digit.

The non-life segment retained its relative dominance in the market, contributing 64.0 per cent to the total premium pool, mirroring its performance in the corresponding quarter of 2024.

On the other hand, the life Insurance segment accounted for 36.0 per cent of all the premiums generated during the same period. Insights into the Non-Life segment indicated that the Oil & Gas portfolio remained the major contributor, accounting for 38.3 per cent of the total Non-Life premiums during the quarter.

This was followed by Fire Insurance with 18.7 per cent and Motor Insurance at 15.8 per cent.

Meanwhile, the Marine & Aviation, General Accident, and Miscellaneous portfolios contributed 10.9 per cent, 9.9 per cent, and 6.4 per cent, respectively.