Insurance sector contributes 1 per cent of GDP – SEC DG
The director Nigerian Securities and Exchange Commission (SEC) Mary Uduk has stated that Nigeria’s insurance sectory contribute not less than 1 per cent of the country’s entire Gross Domestic Product.
Uduk said the contributions of the sector to GDP was realizable due to the different reforms aimed at ensuring consistency and productivity.
She stated this at the Insurance Sector Forum organized by the Commission which was held in Lagos yesterday.
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The acting national commissioner who was represented by Oscar Onyema, said that the current figure represents the third quarter of the year under review.
“As at Q3 2019, the insurance sector contributed less than 1% to the Gross Domestic Product (GDP) of Nigeria.
“Having a penetration rate of 0.31% and an insurance density of 6.2%, the Nigerian Insurance Industry still lags behind its African counterparts – with South Africa having a penetration rate of 14.7%, Kenya 2.8%, Ghana 1.1% and Egypt 0.6%.
“As you are aware, The National Insurance Commission (NAICOM) recently announced the upward review of the minimum paid-up share capital requirement of insurance and reinsurance companies.
He added that the ongoing recapitalization and consolidation exercise is expected to significantly impact the industry and equally present new opportunities in Monitoring and evaluation as well as private equity and public offerings.
” The Nigerian Insurance industry has grown remarkably over the years, generating a Gross Premium Income (GPI) of ₦448.6 billion in 2018, reflecting a 12% growth from 2017.
“The industry also recorded an increase in its asset base by an estimated sum of ₦1.3 trillion as at December 31, 2018, reflecting a 17% Compound Annual Growth Rate over the last three years.
“According to the National Bureau of Statistics, the Insurance sector recorded a nominal growth rate of 6.69% and a real GDP growth rate of 3.96% in Q3 2019 from 4.48% in Q2 2019 and 1.03% in Q3 2018,” he further explained.
He further stated that the undercapitalization of many insurers has hindered the desired growth in the sector.
“Although this data indicates a positive outlook in the Nigerian insurance industry, the reality and headwinds faced by operators in the sector are quite formidable.
Many licensed insurers are largely undercapitalized, thus limiting their ability to take on big ticket in-country risks, as is often required in the oil & gas, marine and aviation sectors.
“The insurance industry presents perhaps the most remarkable investment case of any industry in Nigeria and despite present challenges, it presents numerous opportunities for enhancing the economic fortunes of this country. Foreign investors, recognizing these opportunities have acted accordingly with the likes of AXA, Prudential, Liberty, Swiss Re, SUNU Group, Saham Group, taking strategic positions in the industry.”
