Stronger regulation, increased awareness boosts insurance sector growth in Q4

The nation’s insurance industry at the end of fourth quarter 2022 recorded significant growth in key indices including gross premium, and assets on improved market regulation, awareness and consumer confidence.

The National Insurance Commission (NAICOM) in its market report in the fourth quarter 2022 revealed that the industry recorded a remarkable gross premium of N726.2 billion, representing a growth of 36.3 percent quarter on quarter and 17.8 percent year on year.

This is a remarkable situation compared to the real growth (3.5 percent) of Gross Domestic Product (GDP) over the same period and is attributable to consistent regulatory measures being carried out by the Commission, NAICOM said.

In terms of market size, total assets of the industry stood at N2. 328 trillion in the fourth quarter, sustaining a positive growth that signifies expansion at the rate of 2.4 percent, quarter on quarter and at 4.4 per cent year on year.

This is however relatively lower compared to the prior period when the progression rate was recorded at about 9 per cent (YoY), attributable to the wave of recapitalization drive recorded in that period.”

However, the outlook of the market growth in terms of assets remains positive. With the increasing measures of market deepening and development, recapitalization drive still ongoing, regulatory insurance laws and provisions enshrined in the Insurance bill being reviewed and, digitization of the supervisory wide processes would lead to the realization of the vast potentials in the insurance industry, NAICOM said.

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In terms of claims, the industry N318.2 billion reported claims, representing a 31.2 percent quarter on quarter growth, while N244.3 billion was actually paid out to customers, and NAICOM has attributed this to possible attainment because of growing awareness and market expansion as well as consumer’s confidence.

In terms of business class, non-life business compared to prior periods continued its dominance, contributing 57.4 percent relative to the share of the life business 42.6 percent, keeping about same position in prior period.

The proportional significance of life in the industry sustained a positive course in recent times reflective of the consumer’s confidence and awareness.

In-depth analysis of the non-life segment of market shows Oil & Gas business sustained its market share dominance at 30.25 percent, increasing by 2.4 percent compared to the previous quarter, while Fire Insurance came a distant second, contributing 22.2 percent, and maintaining same pattern of contribution to the gross premium pool of the market.

“Motor Insurance contributed 14.9 percent; Marine & Aviation 12.2 percent, General Accident 11.1 percent and miscellaneous 9.5 percent followed in that order.

“On the other hand, individual life portfolio at 38.6 percent even as its relative contribution fell by about 2.6 percent compared drove life business to third quarter 41.6 percent. In a contrasting path to the previous quarter, group life followed by 34.5 percent per cent while annuity business contributed gross premium income of 26.9 per cent during the period.”