Joseph Inokotong
The total Assets of Nigeria’s Insurance industry stood at N2.328 trillion in the fourth quarter of 2022, sustaining a positive growth that signifies expansion at the rate of two 2.4 per cent, quarter on quarter (QoQ) and at 4.4 per cent, year on year (YoY).
The figure is relatively at a lower momentum compared to the prior period when the progression rate was recorded at about nine per cent (YoY), attributable to the wave of recapitalisation drive recorded in that period.
This is contained in a bulletin of the Insurance Market Performance, a National Insurance Commission (NAICOM) statistics department quarterly report of the insurance market for the fourth quarter, of 2022 made available on Thursday to the Nigerian Tribune Newspaper in Abuja.
However, according to the report, “the outlook of the market growth in terms of Assets remains positive, with the increasing measures of market deepening and
development, recapitalisation drive still ongoing, regulatory Insurance laws and provisions enshrined in the Insurance bill, being reviewed and, digitization of the supervisory wide processes would lead to realising the vast potentials in the insurance industry”.
A necessary insight into the Market size distribution concerning Life and Non-Life Insurance businesses during the period under review shows that the Non-Life Insurance business recorded N1.122.1 trillion, while Life Insurance Business had N1.206.6 trillion”.
The gross premium income generated as of the fourth quarter of 2022 stood at N726.2 billion, representing a growing proportion of about 36.3 per cent, QoQ and indeed, about eighteen per cent (17.8%) year on year.
This is a remarkable situation compared to the real growth of 3.5 per cent of Gross Domestic Product (GDP) over the same period and, is attributable to consistent regulatory measures being carried out by the Commission.
The industry continued to post inspiring numbers in business retention, despite the operational challenges posed in domestic and global economies, and reflective of the market resilience
and increasing capacity.
In the period under review, the industry-wide average premium retention capacity ratio stood at 71.3 per cent, although, slightly a point lower than it held in the previous quarter and four points lower in comparison to the same period (YoY).
Persistently, the Life business retained about the same point of 93.3 per cent from its prior position of 93.8 per cent in quarter three.
In the Non-Life segment which also took a similar pattern, Motor Insurance continued its lead as the highest retaining portfolio with a retention ratio of 93.5 per cent also a point higher than its standing in the prior quarter.
Oil & Gas recorded the least at 35.9 per cent. The oil and Gas portfolio lamentably remained a challenging angle in the market owing to its nature of enormous capital and professional requirements.
Consequently, the retention performance in the current period sustained its prior position when compared to the third quarter as evidenced by the overall Non-Life business ratio of 55.0 per cent, slipping from about 56.6 per cent held in the prior period.
The insurance claims reported during the fourth quarter stood at N318.2 billion representing 31.2 per cent QoQ growth, possible attainment as a result of growing awareness and Market expansion as well as consumer confidence.
In a similar pattern, the net claims paid were reported at N244.3 billion, growing at 17.9 per cent QoQ during the same period.
Insights into the Non-life segment show that Motor Insurance led with regards to claims settlement vis-a-vis gross claims reported at 92.3 per cent signifying nine
points improvement as against its prior position.
Fire Insurance was the least at 46.3 per cent, the only class below average proportion, while all other portfolios of General Accident Insurance at 80.7 per cent, Oil & Gas at 51.6 per cent, Marine & Aviation at 74.4 per cent, miscellaneous Insurances at 86.1 per cent recorded a proportion above the average, of paid claims against gross claims
reported.
Life Insurance business on the other hand reported two points less in comparison to the position held in the prior period of 94.6 per cent of net claims paid compared
to total claims reported during the same period of 2021.
The report states that the “Statistics of the insurance market performance for the fourth quarter 2022 revealed consistent growth in a premium generation, quality improvements in essential indicators including claims settlement and profitability. The market could be ruled as sound and stable whilst, the stance of the market deepening remains optimistic despite operational and macro-economic challenges”.
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