The Life Insurance segment remains the lifeblood of the industry, with a share of total gross premium written at 67.60 percent, according to a latest report by Afrinvest Securities Limited.
The four largest life insurers- AIICO, Custodian, LASACO, and Mansard- collectively grew premiums by 16.13 percent to N87.13 billion, according to the research body.
Notably, the growth or grandiose performance was largely driven by benign regulations and low mortality from the coronavirus pandemic amid a surge in change in annuity life fund.
While the major players in the industry recorded minute losses in the aftershock of the virus, insurers in the European, United States, and Asian recorded high death rates.
“As one of the policies mandated by law, the life insurance segment continues to thrive on regulation as well as the option to purchase life annuity policies with pension proceeds granted by both PenCom and NAICOM,” said analysts at Afrinvest Securities.
“The low death toll rate from the pandemic has been a positive for this sub-group compared with peers globally, where death toll has significantly resulted in huge claims payout. weak retention capacity of the Nigerian insurers would see more premiums ceded to reinsurers both home and abroad,” said the analysts.
The largest 17 largest insurer collectively grew gross premium income by 17.33 percent to N327.39 billion in December 2020 from N279.01 billion as at December 2019, according data gathered by MoneyCentral.
Combined net premium income followed the same trajectory as it spiked by 14.84 percent to N205.48 billion in December 2020 from N178 billion the previous year.
The life insurers suffered huge underwriting losses on the back of acceleration in change in annuity fund, but investment income and foreign exchange gains propelled them to the path of profitability.
Despite the pandemic that elicited a sit at home order by the government, Motor Insurance increased by 12.10 percent to N13.80 billion as at December 2020.
There is room for improvement in this segment if more Nigerians adhere to mandatory third-party insurance policy.
Data from the Nigerian Insurers Association and the National Bureau of Statistics shows that only about 21.5 percent of vehicles in Nigeria are insured.