Insurance industry’s 20% growth rate pushes income to N369bn in six months as assets peak at N2.3trn

Indications that Nigeria’s insurance industry is beginning to impact more positively on the nation’s economy have emerged on the back of improved performance on the sector’s revenue generation with the industry’s supervisory body, the National Insurance Commission (NAICOM) reporting a market gross premium income of N369.2.8 billion in the first six months of 2022.

The insurance industry’s total assets also grew to about N2.3 trillion in the second quarter of 2022, indicating an increased growth rate of 11.9 per cent over the first quarter.

NAICOM while celebrating the industry’s fit said that the market data revealed that the insurance industry grew 20.1% higher than the national real Gross Domestic Product (GDP) of 3.5% during the same period. This indicates the industry’s impressive performance given the recent trajectory.

A statement made available by NAICOM’s spokesman Mr. Rasaaq Salami confirmed an upward swing in the income of virtually all the categories of the insurance business which is grouped along the line of life and non line insurances.

“This performance analysis of the Insurance Industry is an insight into the market behaviour in the second quarter of 2022. The market recorded about N369.2 Billion during the period, indicating a 20.1 per cent growth rate compared to the same period of the previous year and an impressive 65.0 per cent, quarter on quarter. The continued steady growth from the first quarter of the year correlates with the current performance of the period under review”, the supervisory authority observed.

According to the report, “operational confidence remained high despite economic challenges in the financial system and the economy at large, as demonstrated by the relevant retention positions in the sector. The Life business retention for the period was 93% while non-life recorded a ratio of 55% as the industry average stood at about seventy-One (70.5%) per cent. The retention in the non-life despite reporting an above-average level, relative to its prior position (59.4%) in the corresponding period of the preceding year, would require focused attention for improvement as it declined by over four points representing eight per cent, year on year”

It stated that the industry’s financial position indicated a total of N1.2 trillion in assets in Non-Life Insurance while Life Insurance stood at about N1.1trillion.

It stated also that the insured made gross claims of N174.8 billion in the second quarter of the year, representing 47.3 per cent of premiums collected during the period.

It noted that gross claims made in the second quarter of the year indicated a 0.2 per cent growth compared to the corresponding period of 2021.

The market report indicated that net claims paid were N148.2billion, signifying 84.8 per cent of claims made during the period.

“This reflects the professional underwriting capacity of the industry as driven by the intensified regulatory activities of the commission,’’ the bulletin stated.

It added that the insurance business recorded a near-perfect point of 88.9 per cent of claims settlement in Life Insurance as against 76.8 per cent in a non-life segment which stood at 76.8 per cent.

It stated also that motor insurance retained its lead, posting a claims settlement ratio of 92 per cent.

“Progress was more noticeable in the oil and gas sector with 85.7 per cent of claims settlement ratio, an increase of some 43 points compared to its position of 42.8 per cent recorded in the corresponding period of 2021.

“General Accident claims recorded 75 per cent, Fire claims recorded 76.2 per cent, while Aviation and Marine claims recorded 61.9 per cent,’’ it stated.

The bulletin added that sustained market development and growing confidence in the industry would eventually improve the negative peculiarities and challenges of the market.

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