Insurance premium surges 72% on market resilience in Q2

Nigeria’s insurance industry grew its gross premium income by 72 percent at the end of the second quarter of 2024 to N813.1 billion, from N470.7 billion in the first quarter of 2024.

According to analysts at FBNQuest, the strong growth highlights the sector’s resilience, considering the current macroeconomic environment.

The latest bulletin from the National Insurance Commission (NAICOM), reveals that the insurance sector’s gross premium income increased by 72 percent quarter on quarter (q/q) to N813.1 billion in the second quarter of 2024 (Q2’24) from N470.7 billion in Q1’24.

“On an annualised basis, the gross premium income grew by 47.4 percent year on year (y/y) compared with Q2’23 figures. This strong growth highlights the sector’s resilience, considering the current macroeconomic environment.”

The report also indicates that the insurance market remained profitable in Q2’24, with the sector recording an average net loss ratio of 55.5 percent, an increase from the 52.9 percent reported in Q1’24.

“For context, the non-life segment’s net loss ratio stood at 57.2 percent, while the life segment recorded an improved net loss ratio of 53.6 percent in Q2’24.

FBNQuest says, it is also worth noting that the sector’s overall net loss ratio represents market averages, as some underwriters recorded less favourable loss ratios. Consequently, while certain players faced notable challenges, the sector as a whole remained profitable.

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Furthermore, NAICOM’s data showed that Group Life was the largest premium-generating component in the life insurance segment, accounting for 35.8 percent of gross premiums. Meanwhile, the annuity business contributed the least, with a share of 29.7 percent in Q2’24.

Additionally, the oil & gas sector continued to dominate the non-life insurance business, contributing 39.2 percent of the segment’s share, while fire, motor insurance, and marine & aviation followed with shares of 17.5 percent, 15.5 percent, and 12.5 percent, respectively.

The insurance sector’s gross claims for the period stood at N297.9 billion, representing 36.6 percent of the gross premium income.

On the other hand, net claims stood at N259.4 billion, representing about 87.1 percent of all gross claims in the sector.

The sector’s total assets grew by 9.5 percent q/q to N3.69 trillion with the non-life business accounting for N2.29 trillion and the life business contributing N1.39 trillion.

In terms of market concentration risk, the top three life insurance companies accounted for approximately 43.8 percent of total life premiums, while the top three non-life companies held 34.8 percent of the market share.