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The largest and most capitalised insurers Africa’s most populous nation generated a total of N151.09 billion in gross premium written (GPW) in the first quarter of 2023, according to data gathered by MoneyCentral.
This represents an increase of N31.81 billion or 26.67 percent from 2022 as there has been improvements in the business segments despite a slow sector growth as the economy continues to grow at a snail pace.
Annuity business remains the major driver of life premiums, due to the growing number of retirees taking Annuity for Life’s policies as retirement benefits as permitted by the Pension Reform Act 2014.
Analysts say the General Business was bolstered by an increase of third-party motor insurance premium by the regulator.
The insurance industry’s regulator (NAICOM) has increased the Third Party Motor Insurance premium in Nigeria by 200 to 400 per cent for different categories of motor vehicles, and by implication, giving only one week notice to the insuring public of Nigeria to comply.
While the new policy helps underpin revenue of sector players, it has been criticized by operators who argued that the directives would undermine consumers who provided the income that accrue to the entire insurance industry.
It is glaring that policyholders are reeling from rising inflation, spiraling utility bills, and weak macro conditions have significantly shrank their income as over 50 percent of a population of 200 million live below $1.98 a day benchmarked by the World Bank.
Nigeria’s inflation rate rose to 22.41 percent in May 2023, marking the fifth consecutive increase. Despite monetary policies to control inflation, it remains at an over 17-year high.
Insurance sector’s growth fell by 7.25 per cent in the first quarter of 2023, National Bureau of Statistics (NBS) has said.
The NBS in its ‘Nigeria Gross Domestic Product Q1, 2023’ said the finance and insurance sector consists of two sub sectors which are financial institutions and insurance.
It noted that the former accounted for 91.75 per cent while the latter accounted for 8.25 per cent of the sector respectively in real terms in Q1, 2023.
“The reduction in growth is attributed to the adverse effects of the cash crunch experienced during the quarter,” said the agency.
Nigeria ranks one of the lowest in insurance penetration as the sector contributes less than 1 percent to the economy.
According to Swiss Re, the Nigerian insurance sector ranks 63rd globally (out of 88 countries profiled) in terms of gross premium income and the sector contributed about 0.03 percent to global premiums in 2019.
“Insurance penetration and density remain poor in Nigeria, presenting an attractive young and growing population,” said analysts at Afrinvest.
A breakdown of revenue shows AIICO Insurance’s gross premium written (GPW) rose by 28.69 percent to N31.74 billion in March 2023 from N24.63 billion as at March 2022.
AXA Mansard’s GPW was up 20.10 percent to N34.39 billion in March 2023 from N28.63 billion the previous year.
Mutual Benefit Assurance Plc saw GPW grow by 16.10 percent to N12.75 billion in March 2023 from N10.98 billion as at March 2022.
Cornerstone Insurance Plc saw GPW rise by 33.89 percent to N8.04 billion in March 2023 from N6.0 billion as at March 2022.
NEM Insurance Plc GPW spiked by 56.71 percent to N19.91 billion in March 2023 from N12.71 billion as at March 2022.