Nigeria’s EndSARS protest that engulfed the country in 2020 with its attendant losses that cost the insurance industry about N11 billion on claims were most critical on five sectors.
The report by Intelpoint, a data and research arm of Techpremier Media on ‘The Nigerian Insurance Industry‘, shows that out of 388 interviewed business owners in Lagos that suffered losses during the event, five sectors including Fashion & Beauty, Agriculture, Food & Beverages, Retail Trading and ICT were most affected.
Other affected sectors are Services Transportation, Entertainment, Building & Construction, Education, Health Services, Online Retail, Real Estate, Consulting, Engineering Services, Hotel and Leisure, Manufacturing, and Travel/Tourism.
The report also shows that only 3.6 percent of the 388 businesses have insurance cover, while the remaining 94.6 did not have any insurance protection.
Further insights from the report shows that more than half of the affected Small and Medium Scale Enterprises (SMEs) have a staff strength of 2 to 4 employees.
This is as seven in every 10 businesses surveyed laid off some employees after the events of October 2020.
Just as 1,693 staff strength of affected surveyed businesses, says “I don’t know where to start”, tops the list of reasons people don’t have insurance coverage for their businesses
The report further shows that only 13.1 percent of people with no insurance coverage for their business have other backup plans in case of fire or theft
Revealing that many people without insurance cover for their business claim they do not know where to start, further buttresses the fact that education has a major impact on insurance penetration.
“Beyond education, age also appears to sway decision as there are older business owners with insurance cover than younger ones.
This is as people with no insurance cover for their businesses have backup plans in their friends and family, while others use periodic contribution (ajo, esusu, etc) and cooperative societies, among others.
A further breakdown on the EndSARS released earlier by the Nigerian Insurers Association (NIA) showed that 99 claims were settled on malicious damages; 8 claims on business interruption; 455 claims on burglary attacks and 912 claims on fire and burnt sites.
Following huge losses suffered by businesses during #EndSARS, NIA said that the insurance industry, in line with its role of providing financial intermediation and restoring businesses, quickly moved in to provide the necessary cushion for those that have insurance covers.
At the end of 2022 financial year, the industry’s gross premium income stood at N726.2 billion, while total size of the market measured in terms of assets stood N2.3 trillion.
The Nigeria’s insurance industry is optimistic of hitting N1 trillion milestone on gross premium at the end of 2023 financial year when the results must have been have come in.
This is premised on a strong performance at the end of third quarter (Q3) 2023, which figures from the National Insurance Commission(NAICOM) show that the industry had at the third quarter overshoot its full year performance in 2022.
Rasaaq Salami, head, Corporate Communications and Market Development at NAICOM, quoting the Commissioner for Insurance, Sunday Olorunda Thomas during a media briefing shortly after Insurers Committee Meeting held in Lagos December, said the industry has done well both in the area of gross premium income and in claims payment in 2023.
Giving the breakdown of the industry performances since 2021 till date, Salami said, “In 2021 we had gross premium income of N621billion and by 2022 we had N726 billion and by half year of 2023 we had N551 billion.”
With third quarter report, we have already exceeded the annual premium of last year 2022 and by the time we close this year, we might be hitting the N1trillion mark and based on that assessment, we think the industry has performed very well, Salami said.