As Nigeria approaches the 2023 general elections, with people’s focus shifting to who becomes next president of Africa’s most populous nation, businesses including insurance will see slow down in certain lines.
The insurers said like any other business, insurance sector will see slow down in personal line policies in most part of first quarter and improved uptake again in second quarter 2023.
This is as the industry expresses optimisim that its over 13 years Consolidated Insurance Bill, which passed first and second reading in 2020 may see presidential assent soon.
Segun Omosehin, chairman, Nigeria insurers Association (NIA) said, while personal lines may slow down, the corporate will remain upbeat.
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On individual side, we see some reduction because people may be reluctant, and waiting to see how the election plays out, he said
Omosehin said, corporate insurance are for companies and organisations who are going concerns, so they will continue to renew and pay their premium irrespective of the situation.
“For corporates, they are likely to continue because these businesses are a going concern”.
Omosehin speaking on Consolidated Insurance Bill said , it has gone through the final legislative stages and will get presidential accent soon.
He said, the industry has been following through with all the processes and I am indeed delighted to inform you that the Bill has gone through both arms of the legislators, and just remaining legislative procedures preparatory to presidential accent.
We are hopeful that it will receive speedy attention so that the industry can begin to tap into the opportunities provided by the new law, Omosehin said.
Part of the contents of the proposed bill included proper definition of recapitalisation, which has already been re-established in the finance Act 2021, measures to check insurance evaders, in a bid to increase insurance penetration and enforcement in the country, experts noted.
Apart from the industry’s capacity to improve its contributions to the Gross Domestic Product (GDP) and employment creation, it could also provide short and long term funds for government for infrastructure development, experts said.
Analysts believe that the law if passed would change the face of insurance industry strengthen it from the weaknesses of the moribund insurance Act 2003 and place the industry on the global best practices pedestal.
According to Bulletin of the Insurance Market Performance released by the National Insurance Commission (NAICOM), for third quarter 2022, the industry’s gross premium rose 14.9 percent to N532.7 billion year or year, while total assets stood at N3.2 trillion in the same period.
NAICOM said, likened to Nigeria’s growth in real Gross Domestic Product (GDP) of 2.3 percent, the insurance industry fostered at a higher rate of 14.9 per cent growth rate.
According to the Commission, though the operational environment remains challenging due to global and domestic economic challenges, consumer confidence in insurance industry remained high as affirmed by the relevant retentions situation.
“Life business retention for the period was 94 percent, while non-life recorded a ratio of 55 percent as industry average stood at 71.4 percent, NAICOM disclosed.
In terms of share of the market volume, the non-life segment sustained its market dominance at 58.4 percent of the total premium generated.
Insights in the segment show Oil & Gas was the leading driver at 30.8 percent with Fire Insurance following at 21.3 percent.
Motor Insurance stood at 14.6 percent, while Marine & Aviation, General Accident and Miscellaneous reported a share of 11.8 percent, 11.2 percent and 10.3 percent respectively.
Life business on the other hand recorded 41.6 percent of the market production as its share contribution gradually closes up. The share of annuity in the life insurance business lagged at about 25.5 percent while individual life was at 41.2 percent of the premium generated during the period.
The insurance claims component the commission said defines the essence of insurance business as a whole and indeed a major factor in consumer confidence building.
According to the data, during the period claims of N242.6b billion was paid out , slightly lower that the corresponding period of 2021, signifying a decline of 2.3 percent.
The insurance market indeed remained profitable during the period, recording an overall industry average 54.5 per cent, compared to 46.7 percent in the corresponding period of preceding year.
“ the market statistics of the third quarter 2022 has revealed some quality developments in the industry performance indicators in terms of growth, retention, claims management experience and profitability, at levels of which the industry could be ruled as profitable, sound and stable. In cognisance also to the on-going digitisation and market deepening measures of the Commission, the outlook remains strongly positive, the commission said.
