• Saturday, June 22, 2024
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EndSARS: Less than 4% of affected businesses have insurance

Insurance market gets breather on pricing as fire risks turn nasty

Four years after the EndSARS protest that engulfed Nigeria in 2020, report has shown that only about 3.6 percent of affected businesses had insurance protection.

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 that suffered losses during the event, only 3.6 percent of them have insurance cover.

Babatunde Fajemirokun, managing director/CEO, AIICO Insurance Plc who wrote foreword on the report said in the aftermath of the #EndSARS protests, the insurance industry in Nigeria emerged not just as a financial safeguard, but also as a pillar of resilience for businesses and individuals alike.

Fajemirokun said claims amounting to approximately N9 billion was paid out to victims of looting and vandalism, and therefore underscored the tangible impact of insurance in times of crisis.

The report further noted that a larger percentage of those with insurance cover have at least a bachelor’s degree. Evidently, education levels somewhat play a role in whether people subscribe to an insurance product or not.

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 released by the Nigerian Insurers Association (NIA) showed that 99 claims were settled on malicious damage; 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 he 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.