The total assets of the Nigerian Insurance industry in the fourth quarter of 2022 stood at about N2.33 trillion, the latest data from the quarterly report of the country’s insurance market for the fourth quarter, 2022 have shown.
The report released on Thursday in Abuja showed the market performance sustained a positive growth trajectory signifying an expansion at the rate of 2.4 percent, quarter on quarter and at 4.4 percent year on year rates.
Compared to the prior period when the progression rate was recorded at about nine percent (Year on year), the report said the performance was attributable to the wave of recapitalization drive initiated by the insurance sector regulatory authority, the National Insurance Commission (NAICOM) during the period.
The report noted the various initiatives by NAICOM to deepen the insurance market, which gives a positive outlook of the market growth, in terms of assets size.
The growth trajectory, the report noted, was as a result of the increasing measures of market deepening and development, ongoing recapitalization drive, regulatory Insurance laws and provisions enshrined in the Insurance bill, being reviewed and, digitization of the supervisory wide processes targeted at realizing the vast potentials in the insurance industry.
Highlights of the total assets of the Nigerian insurance sector in the fourth quarter of 2022 stood at about N2.34 trillion, with the Market size distribution showing assets under Non-Life Insurance Business at over N1.12 trillion, while Life Insurance Business stood at N1.21 trillion.
The report said the statistics of the insurance market performance for the fourth quarter 2022 revealed consistent growth in terms of premium generation, quality improvements in essential indicators, including claims settlement and profitability.
“It is obvious that the market could be ruled as sound and stable whilst, the stance of the market deepening remains optimistic in spite of operational and macro-economic challenges,” the report noted.
The country’s insurance industry recorded 3.5 percent real gross domestic product (GDP) growth in 2022 due to the consistent regulatory measures adopted by the National Insurance Commission (NAICOM),
The report published by the Statistics department of the insurance industry regulatory authority also showed that gross premium income generated for the corresponding period stood at about N726.2billion, or 36.3 percent, quarter on quarter, and about 17.8 percent year on year.
Details of the report shoed the contributions by each class of business to the gross premium income for the period, with non-life and Life businesses accounting for the highest premium of N309.9 billion, oil and gas sector N125.7 billion and Fire sector N93.6 billion.
During the period, the report said the performance from the non-Life businesses which have been dominating prior to the period, maintained its lead, contributing about 57.4 percent of the gross income relative to about 42.6 percent to the share of the Life business in prior period.
The report the proportional significance of Life in the insurance industry was reflective of the consumer’s confidence and awareness in recent times.
A deeper analysis of the Non-Life segment of insurance market showed that Oil & Gas business sector kept its market share dominance at 30.25 percent, increasing by 2.4 percent, compared to the previous quarter, while the Fire Insurance was second, with 22.2 percent.
Also, Motor Insurance accounted for 14.9 percent of the gross premium pool of the market while Marine & Aviation (12.2 percent), General Accident (11.1 percent) and Miscellaneous (9.5 percent).
On the other hand, Life business was driven by Individual Life portfolio (38.6 percent), from 41.6 percent in the third quarter, against group life insurance, which recorded 34.5 percent and Annuity business contributing 26.9 percent of the gross premium income during the period.
In terms of the contribution of Life insurance to the Gross Premium Income, the report should that individual life, which contributed a large chunk of all premiums, drove the growth in the segment with 39 percent, followed by the group life portion (34 percent) and Annuity 27 percent.
On Insurance Claims, the report said a total of N318.2billion, or 31.2 percent growth in quarter by quarter was recorded reflecting a growing awareness and market expansion as well as consumer’s confidence.
The net claims paid, the report disclosed, stood at about N244.3billion, or about 17.9 percent quarter by quarter figure during the same period, with Motor Insurance settlement under the Non-life segment leading with gross claims of about 92.3 percent, while Fire Insurance was the least at about 46.3 percent.
All other portfolios, namely General Accident Insurance (80.7 percent), Oil & Gas (51.6 percent), Marine & Aviation (74.4 percent), miscellaneous Insurances (86.1percent) recorded a proportion above the average, of paid claims against gross claims reported.
On the other hand, Life Insurance business reported two points less in comparison to the position held in the prior period of 94.6 percent of net claims paid compared to total claims reported during the same period of 2021.
On profitability of the Sector, the report said the insurance market recorded about 47.2 percent net loss ratio during the period under review, suggestive of a workable, cost effective and profitable business in the industry.
The report said the performance was mostly as a result of the Life business sustaining its positive trajectory at 46.5 percent net loss ratio in the current period, while the Non-Life portfolio recorded about 48.1 percent during the same period.
Comparatively, the report said the market recorded an aggregate market average of 54.5 percent of net loss ratio in the previous period, depicting an improved aggregate market desirability and profitability during the current period.
Six companies, which accounted or the average net industry loss ratios above 100 percent included five from the composite category, and one from life, while non-life and reinsurance recorded no losses during the period.
