• Saturday, May 18, 2024
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Insurance industry recovering from COVID as reforms lift growth

Insurance industry recovering from COVID as reforms lift growth

Gradual economic recovery from the impact of COVID-19, ongoing reforms and improved visibility of the Nigerian insurance industry in the national scene has resulted in improved growth of the industry over the past year, the National Insurance Commission has said.

According to the commission, the gross written premium at the end of the 2021 financial year rose to N630 billion from N514.58 billion in 2020 and N508.23 billion in 2019.

The total number of policies written by the industry grew to N2, 485,763, made up of 1,334,855 policies held by individual Nigerians and 1,150,908 policies held by corporate and non-individuals.

Sunday Thomas, commissioner for insurance, said during a media workshop with finance journalists in Uyo, Akwa Ibom State, that the importance of insurance post-COVID-19 and the aftermath of the EndSARS protest could not be overemphasized.

Read also: NAICOM partners FSD Africa on digital solutions for insurance industry

He said the marginal increase in the uptake of policies boosted the retail market and the annuity component.

Thomas said the recently released industry statistics had shown some growth in the sector, even as the Nigerian Bureau of Statistics figures had shown that the sector had recorded a positive increase in almost all parameters and had rated the sector as one of the fastest-growing in activities.

According to him, the commission’s efforts in the development of the market is an all-inclusive one, from the creation of avenues to deepen insurance penetration to increasing access to insurance products via digital platforms and increasing visibility of insurance across the nooks and crannies of the country.

“The commission recently partnered with Financial Sector Deepening Africa to launch the Bimalab Nigeria, a programme aimed at accelerating the insurtech innovation,” he said.

Thomas said the commission would soon unveil its sandbox to give room for innovative expansion of insurance.

He said the recently released web aggregators’ guideline was aimed at opening access to insurance, describing it as a means of creating a convenient market for insurance.

Barineka Thompson, director of supervision directorate at NAICOM, said although there had been a general negative effect of COVID-19, some sectors of the Nigerian economy reported positive growth, including the insurance sector.

He said the sector had been resilient and largely stable during the COVID-19 period, as shown in the growth in premium for 2019, 2020 and 2021.

Thomson said the growth in 2021 came from transactions in oil and gas business, which contributed 30.1 percent; fire business, 19.1 percent; and motor business, 15.2 percent, from the non-life category.

He said for life business, growth came from individual life (47.7 percent), and group life (26.9 percent)

He said the growth in claims expense was caused largely by the difficult times of COVID-19 and EndSARS riot across the nation, adding that the industry operators as of February 2022 had paid out N11 billion on EndSARS losses.

Insurers reported market retention, with topmost class in motor (94.8 percent) and oil and gas (35.4 percent) in 2021, Thompson said