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Listed Nigeria Insurers Record N355.40bn Premium Income in 2021

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There has been an improvement in the premium income of the largest listed Nigeria insurers who operate in a challenging business environment, which underscores the gradual increase in insurance acceptance in both formal and informal sectors of the economy.

These insurers generated a total Gross Premium Income (GPI) of N371.29 billion in the 2021 financial year, which is 16.25 percent higher than 2020’s N305.71 billion, according to data gathered by MoneyCentral.

Also, combined gross premium written followed the same growth trajectory as it was up 19.05 percent to N371.29 billion in December 2021 from N311.87 billion the previous year.

Some analysts attribute the uptick in revenue to the gradual reopening of the economy that bolstered volume of transactions and accelerated renewals.

They added that sector players need to pay more attention to genuine claims settlement, as it remains a viable outcome for insurance penetration and acceptance.

In line with our expectation, real GDP grew by 4.03% yoy in the third quarter of the year.

The economy grew by 4.03 percent year on year (yoy) in real terms. This was lower than the 5.01 percent yoy growth reported in Q2-2021, but was a major cross compared to the 3.62 percent contraction in Q3-2020 According to the National Bureau of Statistics

The insurance sector continues to lag  its peers in terms of penetration which stood at 0.5 percent compared with  South Africa (12.9 percent), Kenya (2.8 percent), Angola (0.8 percent) and Egypt (0.6 percent)  while density at $6.2 also remains weak compared to South Africa  ($762.5), Kenya ($40.5), Angola ($30.5) and Egypt ($22.8).

Insurers have continued to develop innovative products, and alternative channels of distributions and strategic initiatives that will enable them to achieve their corporate goals and objectives.

Many have embraced digital transformation to underpin premiums and bolster efficiency as inflationary pressures, currency volatility, and decrepit infrastructure are ballooning operating cost that lifts the combined ratio above the threshold.

AIICO Insurance’s gross premium written (GPW) was up 16.31 percent to N71.68 billion in December 2021 from N61.97 billion as at December 2020.

A breakdown of GPW shows premium income from non-life rose by 36 percent to N19.04 billion in December 2021 from N14 billion as at December 2020. Premium income from the Life segment increased by 19.45 percent to N49.73 billion in December 2021 from N41.63 billion the previous year.

Gross premium income (GPI) increased by 22.45 percent to N55.73 billion in December 2021 from N45.51 billion as at December 2020.

A breakdown of GPI shows revenue from Non-Life business was 40.93 percent to N28.30 billion as at December 2021 while Life (Group Life and Individual) 23.72 percent to N9.23 billion.

Custodian Investment Plc’s gross premium income increased by 13.91 percent to N66.22 billion in the period under review from N58.14 billion the previous year.

Non-life gross premium income was up 5.20 percent to N33.75 billion as at December 2021 from N32.08 billion the previous year. Life Insurance gross premium rose by 24.64 percent to N32.47 billion in the period under review from N26.05 billion the previous year.

Cornerstone Insurance Plc gross premium income increased by 24.02 percent to N19.49 billion in December 2021 from N15.18 billion as at December 2020.

Cornerstone Insurance saw premium income from Non-Life Insurance increase by 28.47 percent to N15.16 billion in December while revenue from Life business dipped slightly by 3.24 percent to N5.36 billion.

NEM Insurance Plc gross premium income was up 22.90 percent to N19.49 billion in December 2021 from N15.86 billion as at December 2020.

Despite the sturdy growth at the top line (revenue), rising claims and total operating expenses have pressured profitability, a triple whammy for an industry that is reeling from poor valuation as investors’ apathy towards sector shares heightens.

To diversify earnings streams, insurers have developed a slew of Agricultural products as risk management initiatives for both small, medium, and large-scale farmers and agribusinesses.

Leadway Assurance, one of Nigeria’s leading insurers, has extended its flagship Agric-insurance cover to now cover crop farmers for losses incurred due to cattle grazing encroachment into their farmlands.

This unique and timely policy is in response to the plight of farmers who have suffered huge financial losses arising from the destruction of their crops and farmlands during encroachment by nomadic cattle.

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