The total Assets of the insurance industry stood at N2.32 trillion in the fourth quarter of 2022, representing a 2.4 per cent, expansion quarter-on-quarter and 4.4 per cent year-on-year, the National Insurance Commission (NAICOM) disclosed yesterday.
Also Gross Premium Income (GPI) totalling about N726.2 billion was generated by the sector in the review period.
In addition, insurance claims reported during the quarter stood at N318.2billion, representing a 31.2 per cent quarter-on-quarter growth, while net claims paid amounted to N244.3 billion. This represented a growth of about 17.9 per cent quarter-on-quarter.

This was contained in Bulletin of the Insurance Market Performance for the period under review, which was made available to news men.
The report noted that total assets was however relatively at a lower momentum compared to the prior period when the progression rate was recorded at about nine per cent year-on-year due to the wave of recapitalisation drive recorded in that period.

However, the report stated that, the “outlook of the market growth in terms of assets remained positive, with the increasing measures of market deepening and development, recapitalisation drive still ongoing, regulatory insurance laws and provisions enshrined in the insurance bill, being reviewed and, digitalisation of the supervisory wide processes would lead to the realisation of the vast potential in the insurance industry, ” the commission stated.

The GPI performance represented a growth of about 36.3 per cent quarter-on-quarter and about 18 per cent year-on-year.
The improvement in the market indices was attributable to the growing awareness and market expansion as well as consumer’s confidence.

Data on the non-life segment showed that motor insurance led with regards to claims settlement vis-a-vis gross claims reported at about 92.3 per cent signifying a nine points improvement as against its prior position.

Fire insurance was the least with about 46.3 per cent, and the only class below average proportion.
Others included General Accident Insurance (80.7 per cent), Oil Gas (51.6 per cent), and Marine and Aviation (74.4 per cent),
This was relatively at a lower momentum compared to the prior period when the progression rate was recorded at about nine per cent (YoY), attributable to the wave of recapitalization drive recorded in that period.

The report added that there was continuous improvement in retention propensity, increased market size and industry profitability, compared to the preceding quarter.
The results were particularly remarkable given the real growth 3.5 per cent of Gross Domestic Product (GDP) over the same period.
The positive data was attributed to the consistent regulatory measures being carried out by the commission in recent times which had restored some measure of professionalism in insurance practice thus, boosting public confidence.

Non-Life business maintained its dominance, contributing about 57.4 per cent to GPI relative to the share of the Life business which stood at 42.6 per cent, similar to the preceding quarter.
According to the market update, the proportional significance of Life in the industry sustained a positive course in recent times reflective of the consumer’s confidence and awareness.

Further analysis of the Non-Life segment of the insurance market showed that oil and gas business sustained its market share dominance at 30.25 per cent, representing an increase of 2.4 per cent compared to Q3.
Fire insurance accounted for 22.2 per cent maintaining same pattern of contribution to the gross premium pool of the market while Motor Insurance accounted for 14.9 per cent.
Other contributors to GPI in Q4 include Marine & Aviation 12.2 per cent, General Accident 11.1 per cent and Miscellaneous 9.5 per cent.

However, Life business was driven by Individual Life portfolio which accounted for 38.6 per cent even as its relative contribution fell by about 2.6 per cent compared to Q3 which recorded 41.6 per cent.

Group life contributed 34.5 per cent per cent to GPI while Annuity business contributed 26.9 per cent during the period under review.
The commission however pointed out that amid operational challenges confronted in domestic and global economies, the industry continues to post inspiring numbers in premium retention capacity reflective of the market resilience and increasing capacity.
In the period under review, industry wide average retention ratio stood at about 71.3 per cent although, slightly a point lower than it held in the previous quarter and four points lower in comparison to same period year on year.

Persistently, the Life business retained about 93.3 per cent compared to 93.8 per cent in the preceding.
In the Non-Life segment which also took a similar pattern, Motor Insurance continued its lead as the highest retaining portfolio with a retention ratio of about 93.5 per cent.
Similarly, oil and gas recorded the least business retention at 35.9 per cent.
According to NAICOM, “The oil and gas portfolio lamentably remained a challenging angle in the market owing to its nature of enormous capital and professional requirements.

“Consequently, the retention performance in the current period sustained its prior position when compared to the third quarter as evidenced by the overall Non-Life business ratio of 55.0 per cent, slipping from about 57 per cent held in the prior period.”

The report added, “Statistics of the insurance market performance for the fourth quarter 2022 revealed consistent growth in terms of premium generation, quality improvements in essential indicators including claims settlement and profitability.
“It is obvious that the market could be ruled as sound and stable whilst, the stance of the market deepening remains optimistic in spite of operational and macro-economic challenges.”

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