Insurance industry, comprising of over 60 underwriting companies reaped N2.8 trillion gross premium income between 2017 and the second quarter of the current year, just as insurers equally paid N1.4 trillion gross insurance claims to policyholders within these periods, data from NAICOM has shown.
The claims paid, according to findings, translates to 50 per cent of the premium income made within the period under review.
A breakdown of the data sourced by LEADERSHIP from the National Insurance Commission(NAICOM) showed that insurance sector made N372.4 billion premium income in 2017, went up by 14.5 per cent in 2018 to N426.2 billion.
In 2019, it was N508.2billion, grew to N514.6 billion in 2020 and jumped to N616.6 billion in 2021 financial year.
However, as at the second quarter of 2022, the gross premium income had stood at N369.2 billion, with market observers expecting the industry to grow its premium income for 2022 to N700 billion.
Similarly, in the claims payment category, the industry recorded N186.4billion gross claims in 2017, paid N252.2 billion in 2018, compensated policyholders who suffered insured risks in 2019 to the tune of N225.2 billion while in 2020, the industry paid N247.2 billion even as the industry paid N 336.8 billion in the 2021, which is the last financial year. However, by second quarter of the ongoing year(2022), the industry reported N174.8billion gross claims, cumulatively, amounted to N1,4trillion within those years.
Speaking at the 2022 seminar for insurance journalists in Lagos, assistant director, Statistics department, NAICOM, Mr. Umar Baba, while speaking on this development, noted that, the Nigerian Insurance industry despite its relative size, has proven to be one of the most resilient and fastest growing sectors in the Nigerian economy
In the last five-years, he said, the industry defied several economic recessions and the effects of the global COVID-19 pandemic, at a period when other sectors of the economy pointed south.
The market as measured by the industry gross premium income (GPI) has maintained a steady growth throughout the period of 2017 to the current, as the market grew by 65 per cent between 2017 and now, he said.
To him, “during the period, the rate of growth was put at 14.2 per cent for 2017, 14.5 per cent in 2018 and, 19.2 per cent, 1.2 per cent and 19.7 per cent for 2019. 2020 and 2021 respectively. It is apparent that the trend maintained a steady rise except in 2020 of which it took a v-shaped recovery thereafter, rebounded to about 20 per cent in 2021.
“In 2022, the GPI stood at N223.8 in the first quarter, which was six per cent growth on YoY and, N369.2b in the second quarter, indicating a 65 per cent QoQ growth and at about 20 per cent YoY, apparently outpacing the real economic growth which grew at just about 3.5 per cent during same period.”
Major drivers during the period of 2017 – 2021, he said, were the special risk insurance of Marine & Aviation at about one hundred and seventy (169.6 per cent) per cent, Miscellaneous Insurance at 98.4 per cent and Life Insurances at 71.3 per cent.
In 2022 however, he pointed out that, Fire Insurance (32.5 per cent) and Life business (24.5 per cent) recorded highest rates at the end of H1 period, Year-on-Year(YoY).
The Insurance market, he stated, has continued to grow in gross claims reported reflective of the increasing policyholder enlightenment, market confidence from both demand and supply sides, and indeed effects of regulatory measures meant to ensure for claims settlement.
“Gross claims reported a fluctuation over the period to peak at a growth proportion of 36.2 per cent over the years representing N336.8b in 2021 from N186.4 billion in 2017. the percentage net claims paid has, owing to improved market discipline and the approach of customer focused regulation, remained very high around the border of 70 per cent,” he pointed out.
Similarly, at his investiture as the new Nigerian Insurers Association( NIA) chairman, Mr. Olusegun Omosehin, is optimistic of a brighter future for insurance industry, judging from the growth in premium income as well as promptness in claims settlement in the last five years or so, while urging operators to conduct their businesses professionally, increase awareness of their respective products and services while leveraging on technology and innovation to boost insurance acceptance in the country.
At a different forum during the weekend, the managing director/CEO, NSIA Insurance Limited, Mr. Moruf Apampa, had stated that insurance has a brighter future, which he said, lies in the retail market, urging operators to deepen the retail insurance market to increase insurance penetration and contribution to the nation’s Gross Domestic Product(GDP).
