By Motolani Oseni
National Insurance Commission (NAICOM) has said that the total assets of the insurance industry in Nigeria in the fourth quarter of 2022 rose to N2.3 trillion.
NAICOM in its quarterly data on insurance business, obtained by The Daily Times on Thursday stated that Life Insurance Business amounted to N1.2066 trillion while Non-Life Insurance Business was N1.1221trillion, while the gross premium income generated as at the fourth quarter of 2022 stood at N726.2 billion, representing a growth proportion of about thirty-Six per cent (36.3%), quarter on quarter and indeed, about eighteen per cent (17.8%) year on year.
Analysis of the figures, therefore, showed a remarkable situation compared to the real growth (3.5%) of Gross Domestic Product (GDP) over the same period and, is attributable to consistent regulatory measures being carried out by the Commission.
Non-Life business as in the prior periods, continued its dominance, contributing about fifty-eight (57.4%) per cent relative to the share of the Life business (42.6%), keeping about same position in prior period.
According to the Commission, “The proportional significance of Life in the industry was sustained a positive course in recent times reflective of the consumer’s confidence and awareness. In-depth analysis of the Non-Life segment of market shows Oil & Gas business sustaining its market share dominance at 30.25 per cent, increasing by two point (2.4%) compared to the previous quarter.
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“The figure posted by Fire Insurance came a distant second (22.2%) maintaining same pattern of contribution to the gross premium pool of the market while Motor Insurance (14.9%), Marine & Aviation (12.2%), General Accident (11.1%) and Miscellaneous (9.5%) followed in that order.”
On the other hand, Life business was driven by Individual Life portfolio (38.6%) even as its relative contribution fell by about (2.6%) compared to third quarter (41.6%). In a contrasting path to the previous quarter, group life followed by about thirty-five (34.5%) per cent while Annuity business contributed gross premium income of about twenty-seven (26.9%) per cent during the period. The actual percentage share of various classes remains the same to a large extent, relative to the respective contributions recorded in the previous period.
“In the phase of operational challenges posed in domestic and global economies, the industry continues to post inspiring numbers in business retention, reflective of the market resilience and increasing capacity. In the period under review, industry wide average retention ratio stood at about seventy-one per cent (71.3%), although, slightly a point lower than it held in the previous quarter and four points lower in comparison to same period (YoY). Persistently, the Life business retained about the same point of ninety-three (93.3%) from its prior position of 93.8 per cent in quarter three.
“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 about ninety-four per cent (93.5%) also a point higher than its standing in the prior quarter. Oil & Gas recorded the least at about thirty- six per cent (35.9%).
“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 fifty-five per cent (55.0%), slipping from about fifty-seven per cent (56.6%) held in the prior period”, it stated.
Consequently, Insurance premium retention of the market remains robust, above average and healthy except in the Oil & Gas business. The same is also true for the Life Insurance business during the period under review. The Insurance Claims reported during the fourth quarter stood at N318.2billion representing a 31.2 per cent QoQ growth.
In a similar pattern, the net claims paid were reported at N244.3billion, growing at about 17.9 per cent QoQ during the same period, while insights into the Non-life segment shows that Motor Insurance led with regards to claims settlement vis a vis gross claims reported at about 92.3 per cent signifying a 9 points improvement as against its prior position.
Fire Insurance was the least at about forty-six per cent (46.3%), the only class below average proportion. All other portfolios of General Accident Insurance (80.7%), Oil & Gas (51.6%), Marine & Aviation (74.4%), miscellaneous Insurances (86.1%) recorded a proportion above the average, of paid claims against gross claims reported.
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