• Sunday, February 25, 2024
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Individual, family protection plans drive insurance growth

Individual, family protection plans drive insurance growth
…Gross premium hits N729bn

Increasing quest for protection of self and dependants against unexpected occurrences and future wellbeing are driving the uptake of individual life, and family protection insurance products. This, in turn, is stimulating the growth of the sector.

Data released by the National Insurance Commission (NAICOM) titled ‘Nigerian Insurance Market at a Glance’, the performance of the insurance industry in the third quarter of 2023 shows that gross written premium grew to N792 billion, with individual life and group life contributing the highest.

From the data, individual life insurance contributed 36.4 percent, while group life contributed 34.5 percent at the end of the third quarter of 2023.

In the general business category, oil and gas business contributed 28.9 percent, while fire and motor business contributed 23.6 percent and 18.1 percent respectively.

Chika Onwunali, partner at Premium Debate said, “It’s not a surprise that individual life insurance is leading the table because retiree’s annuity offers a lot of opportunity for life insurance growth”.

He said that this could even get better if life insurance companies can put their house in order, and build capacity for risk management with actuarial experts.

Onwunali said, “Even with increasing economic challenges, the need for life insurance, health, and protection for dependants have become even more important.”

Sunday Thomas, Commissioner for Insurance, speaking on the future of the industry during a recent insurance directors conference in Lagos, said the sector’s 10-year Strategic Transformation Roadmap will continue its transformation journey along seven strategic thrusts.

According to him, this will have the objective of achieving the corresponding goals of transforming the regulatory environment to sustain the industry growth, transition to a risk-based capital model, promote insurance awareness and adoption, and broaden insurance and product offerings. He noted that it will improve the effectiveness of distribution channels, enhance digitalisation of the insurance industry, deepen the industry’s talent pool and capabilities, as well as support Nigeria’s economic transformation and sustainability agenda.

Thomas said the strategic roadmap was expected to revolutionise the insurance sector with a well-coordinated implementation approach.

“Insurance penetration is expected to move from the current rate of 0.4 percent to 2.1 percent by 2033, which will substantially improve the rating of the Nigerian insurance market in the global insurance map.”

On the performance and potential, the sector has over the years experienced an average steady year-on-year growth of 15.1 percent in premium income. This, however, is far below the opportunities provided by the Nigeria economy, Thomas said

According to NAICOM, gross claims in the third quarter stood at N365.5 billion, while net claims was N259.0 billion.

The total size of the market was N2.8 trillion, which when broken down shows that total assets for non-life insurance was N1.74 trillion and total assets for life was N1.07 trillion.

Total paid-up capital for the industry was N422.3 billion during the review period, while total capital stood at N848.9 billion and total statutory deposit amounted to N26.7 billion.