Efforts of the insurance industry at occupying a prime position in the growth and development of the nation’s economy seem to have started yielding the desired results going by the surge in the earnings of insurance companies as revealed by the industry’s supervisory authority, the National Insurance Commission (NAICOM).
The Insurance industry in the third quarter of 2022 is said to be a virtue of an excellent performance in the financial services sector of the economy with insurance generating a cumulative gross premium income of N532.7 billion as the cl0se of business in September 2022. The accomplishment represents a growth rate of 15 per cent when compared with the figure earned in the corresponding period of 2021.
Likened to the Nigeria’s growth in real Gross Domestic Product (GDP) of 2.3% during the same period, the insurance industry fostered at a higher rate of 14.9% per cent growth rate, a performance which industry watchers described as impressive.
According to industry statistics released by NAICOM, earnings from the various classes the non-life insurance business of the market showed that all classes stood at an above average position in terms of income except for the Oil & Gas business which witnessed a decline at 36.9% when compared to the same period in 2021 in which it recorded about 41.9% per cent in retention share.
NAICOM noted that insurance companies are now responding very well to their claims payment obligations considering that a total claim of N242.6 billion was paid in the first nine months of 2022. The insurance claims component defines the essence of insurance business as a whole and indeed a major factor in consumer confidence building.
“During the third quarter of 2022, the gross claims reported by market of N242.6billion was slightly lower compared to the corresponding period of 2021, signifying a decline of -2.3% in the total claims reported by policyholders. However, the ratio of total claims to gross premium stood at about forty-six per cent during the current period. The net claims paid on the other hand stood at about N207.2 billion, signifying an 85.4% of all gross claims reported during the period. The Life Insurance business recorded a near perfect point of 95.0% claims settlement against all the reported claims while non-life segment stood generously at above seventy (72.4%) per cent during the same period”, NAICOM had noted..
According to the commission, the array of proportional claims settlement took a direct reflection of the market premium retention as Motor Insurance retained its lead, posting a claims settlement ratio of about ninety one per cent. This is followed by Miscellaneous insurances reporting about eighty one per cent as paid claims ratio to all reported claims during the period while General Accident (74.4.%),
Marine & Aviation (74.3%) and Fire Insurance (59.6%) trailed in that order. The Oil & Gas business stood out as the most improved portfolio in this respect at about sixty five (65.3%) per cent of claims settlement ratio, an increase of forty-one points compared to its position of 23.9% recorded in the corresponding period of 2021. Similarly, the claims settlement ratio of the life business stood at 95% while the aggregate industry average was recorded at 85.4% during the quarter.
The Gross Premium Income by class of non-life and life businesses for the period under review showed that the non-life segment sustained its market dominance at 58.4% of the total premium generated. Insights in the segment show Oil & Gas was the leading driver at 30.8% with Fire Insurance following at 21.3%. Motor Insurance stood at 14.6% while Marine & Aviation, Gen. Accident and Miscellaneous reported a share of 11.8%, 11.2% and 10.3% respectively. Life business on the other hand recorded 41.6% of the market production as its share contribution gradually closes up. The share of Annuity in the Life Insurance business lagged at about twenty six per cent (25.5%) while Individual Life was at 41.2% of the premium generated during the period.
“Although the insurance industry’s operational environment remains challenging due to global and domestic economic challenges, its confidence remains high as affirmed by the relevant retentions situations. The Life business retention for the period was 94% while non-life recorded a ratio of 55% as the industry average stood at about 71.4% per cent. Indeed, in the Life Insurance business recorded commendably, a near perfect point of about 93.8% during the period under review”, the commission further revealed.
For a better society
Kindly follow us across all our Social Media platforms to stay up-to-date with the latest news and happenings in Nigeria and Across the Globe.