Q2: Insurance Sector Premium Up 20.1% to N369.28bn

Ebere Nwoji

The insurance sector in the second quarter of this year 2022, recorded N369.28billion premium indicating 20.1 per cent growth compared to the performance in the same period the previous year and 65.0 percent quarter on quarter (Q-o-Q) performance.

This was contained in the latest sector performance statistics released by the National Insurance Commission (NAICOM).

Describing this as a notable performance, NAICOM said the performance analysis was an insight into the market behavior of the insurance sector in the period under review.

Giving a premium contribution analysis by each class of business, the commission said out of the N369.2 billion, life insurance contributed N150.0 billion, followed by oil and gas insurance which yielded N71.2 billion, Fire insurance yielded N45 .3 billion while Motor insurance yielded N32.4 billion.

Marine insurance contributed N26.9 billion premiums while General Accident policy yielded N24.0 billion.

According to NAICOM, the performance showed that the insurance sector grew 20.1 percent higher than the National Real Gross Domestic Product (GDP) of 3.5 percent during the same period.

NAICOM, said the proportional participation of each class of business suggested the continued improvement of life insurance business as driven by its component of the individual life noting that the Non-Life segment maintained its primacy at 59.3 percent of the total premium generated. 

“Insights in the segment show Oil & Gas was the leading driver at 32.5 percent with a distant second at 20.7 percent for Fire. Motor Insurance stood at 14.8 percent while Marine & Aviation, Gen. Accident and Miscellaneous reported a share of 12.3 percent, 10.9 percent and 8.9 percent in this order. 

“Life business on the other hand recorded 40.6 percent of the insurance market production as its share contribution, gradually closes up. The share of Annuity in the Life Insurance business logged at about 24.7 percent while Individual Life held a major driver position at 41.8 percent of the premium generated during the period”, the commission said.

NAICOM, said operational confidence remained high in spite of economic challenges in the financial system and the economy at large, as demonstrated by the relevant retention positions in the sector. 

According to the commission, Life business retention for the period was 93 percent while non-life recorded a ratio of 55 percent as the industry average stood at about 70.5 percent. 

The Commission, said retention in the non-life despite reporting an above average level, relative to its prior position of 59.4 percent in the corresponding period of the preceding year, would require a focused attention for improvement as it declined by over four points representing eight per cent, year on year.

The commission said the sector during the period witnessed only 0.2 percent growth in claims compared to the corresponding period of 2021. It said the industry’s statistics for gross claims in Q2 of 2022 stood at N174.8 billion, representing 47.3 percent per cent of all premiums generated during the period. 

“This occasion reflects the professional underwriting capacity of the industry as driven by the intensified regulatory activities of the Commission. The net claims paid on the other hand stood at about N148.2billion, signifying an 84.8 percent of all gross claims reported during the period. The Life Insurance business recorded a near perfect point of about 88.90 per cent claims settlement as against the reported claims while non-life segment stood at about 76.8 per cent”, NAICOM said. 

According to the commission, the performance in the Oil & gas in terms of claims settlement recorded some improvement when compared to quarter two of the previous year.

The commission was optimistic that a sustained market development and growing confidence in the industry would eventually improve the negative peculiarities and challenges of that section of the market.

Profit wise, NAICOM said the Insurance market remained profitable during the period, recording an overall industry average of about 56.9 percent thereby maintaining a relative position 57.7 percent recorded in the corresponding period of preceding year.