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Tag: Insurance industry

  • Insurance industry’s premium rises by 56% to N1.6tr

    Insurance industry’s premium rises by 56% to N1.6tr

    Nigerian insurance industry reported a gross written premium of N1.562 trillion in 2024, a 56 per cent increase over the N1.003 trillion recorded in 2023.

    Non-life business accounted for major growth standing at N1.1 trillion, while life business generated N470 billion.

    The industry’s total assets expanded significantly to N3.9 trillion, a 46.1 per cent rise from N2.67 trillion in 2023.

    Market capitalization also grew substantially, reaching N1.2 trillion, a 41 per cent increase from N850 billion in 2022.

    Net claims paid by the industry amounted to N622 billion, with the non-life segment accounting for N437 billion and the life segment for N185 billion.

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    Chairman, Nigerian Insurers Association (NIA), Mr. Kunle Ahmed who made this known during the 54th annual general meeting of the association said the industry in 2024 experienced notable developments, shaped by regulatory changes, economic conditions, and evolving market dynamics.

    Ahmed stated that within the non-life sector, fire, oil and gas insurance lines were key drivers of revenue growth, with all non-life products demonstrating strong quarter-on-quarter increases.

    He said: “The life insurance segment also saw substantial growth with group life insurance emerging as the largest premium generator. Despite this growth, insurance penetration remains low, with efforts to improve penetration tied to addressing the enforcement of compulsory insurance policies, improvement in claims payment process and the consolidation of the insurance enabling laws”.

  • Agusto & Co Assigns a ‘Bb‘ rating to insurance industry

    Agusto & Co Limited,  Pan African credit rating agency has assigned a “Bb” rating to the Insurance Industry in its newly published 2019 Nigerian Insurance Industry report.

    The assigned rating reflects heightened risks in the country’s geopolitical and macroeconomic environment, weak gross domestic product (GDP) growth and inflationary pressures. In addition, dwindling crude oil prices and a contractionary monetary policy stance aimed at forestalling speculative activities on the naira both impact the assigned rating.

    Agusto & Co’s rating takes into cognisance the size and strategic importance of the Insurance Industry in Nigeria. Though relatively small, with a Gross Premium Income as a percentage of GDP at 0.4 per cent, the Industry’s economic importance is noteworthy. The Agency highlights the primary responsibility of insurers in supporting businesses and individuals recover from unexpected losses promptly, through claims payments.

    The Insurance Industry promotes economic growth by mobilising domestic savings most of which is used to fund the budget deficit through investments in treasury bills. According to an insurance analyst at the rating agency, there has been an influx of foreign direct investments (FDIs) over the last two years which has resulted in changes in the Industry’s shareholding structure.

     

  • CEOs anxious over insurance industry recapitalisation

    THERE is anxiety in the insurance industry over the recapitalisation directive issued by the National Insurance Commission (NAICOM) to Chief Executive Officers (CEOs).

    Some CEOs have kept mum over the new development that will categorise them into Tier 1, Tier 2 and Tier 3; others are worried over the ‘’wrong’’ timing of the regulator’s directive.

    NAICOM last week introduced a Tier-Based Minimum Solvency Capital (TBMSC) structure, a complementary measure to its ongoing implementation of the Risk-Based Supervision (RBS) model that will lead to recapitalisation by the risk-bearing firms.

    It said with effect from January 1, next year, the companies will be classified into three different tiers based on their individual strength and capacity to underwrite big or small risk. Under the new arrangement, Tier 1 companies will be considered as the biggest player, Tier 2, the middle player and Tier 3, the smallest player.

    One of the CEOs, who spoke on condition of anonymity, said it is worrisome why the regulator should choose this time of the year to roll out such a directive.

    Though he said had nothing against the Commission’s plan to make companies recapitalise, he faulted the timing, which he said, wasn’t appropriate considering the imminence of a general election in the country.

    He said aside that it would be difficult to achieve the set target in five months,  it would be also be extremely difficult to raise money during an election year.

    He said: “We are not saying that recapitalisation is not good, but the timing is inappropriate. Election is coming next year and it will be difficult to raise money. The Commission expects us to merge or acquire, but it will be difficult to achieve either of these in five months.

    “The operators and the regulator just started the rebranding process of the industry. We need to win the people’s trust and the regulator is now talking of Tier 1, Tier 2 and Tier 3.”

    Another CEO kept mum, but continuously said: “It is well” when contacted while another said he and his management team are preparing to meet with the Board of Directors to brief them on the implications of the new development.

    Another CEO urged the regulator to be cautious of the likely negative impact the move would have on the image of operators in the industry.

    According to him, classifying a company small and big creates a negative image for the companies as not many people would like to go and patronise a company already classified as small by no less and organisation than the regulator.

    The RBS model will see the insurance industry recapitalise following the recapitalisation exercise carried out in 2007.

     

  • Ghana’s insurance industry profitability still low, says Commissioner

    Despite the Ghanaian insurance industry’s gross premium income’s significant growth over the years, profitability has not increased commensurately, Commissioner of the National Insurance Commission (NIC), Ms Lydia Lariba, has said.

    She made this known at a cocktail organised by SIC Life for its staff in Accra, Ghana.

    The Commissioner said competition in the industry has intensified with the entrance of a few companies.

    Besides, she said efficiency continues to be low as most companies are very small in size and do not have the needed capital and resources for growth.

    She said: “Even though product innovation and distribution channels have improved significantly, we are still largely unable to reach out to the informal sector.

    “The Commission has taken a number of steps to help the industry overcome the challenges, adding that NIC had embarked on a vigorous consumer education programme to help improve insurance penetration.”

    Speaking on the performance of SIC Life, she said the company appears to be growing from strength to strength in spite of the challenges she had stated.

    The company’s expense ratio continues to be one of the lowest in the industry. The company’s third quarter returns show that profitability has improved almost 100 per cent over 2015, she noted.

    Also speaking, the Chief Executive Officer (CEO), SIC Life, Aaron Anafure said last year was a relatively challenging for the company in terms of its technical results.

    “In the year under review, the premium income made from the combined Core Life and Sika Plan businesses, as at the end of the 3rd Quarter 2016, was GH¢159,477,002, marginally exceeding the premium income target 0.02 per cent. Out of this, Core Life contributed 68 per cent while Sika Plan contributed 32 per cent. Since its introduction in November 2003, Sika Plan had remained the market leader in its product category in the Ghanaian insurance industry and the most patronized within the micro-finance sector.

    “Compared with 2015, 2016 premium income grew nominally by 18.57 per cent. New business for core life grew by 17.54 per cent from 22,548 to 26,503 in numbers. The total claim payout for the same period was GH¢107,848,499, representing 67.63 per cent of actual premium income.

    “Overall management expenses totaled GH¢28,929,000.00, resulting in an expense ratio of 18.14 per cent. At end of third quarter of 2016, the company has recorded profit-before-tax of GH¢16,475,190 (un-audited accounts),” he added.

  • Government, insurance industry launch flood protection plan

    The property flood resilience action plan, launched on Friday in the United Kingdom (UK) brought together the government and the insurance industry with the aim of ensuring property owners are better equipped to prepare for flooding.

    The independent report is set to help people better protect their homes and businesses from risk of flooding and get back into them sooner if it does happen.

    According to InsuranceAge,  it explores the following: the role of building regulations and certification, in encouraging use of flood resistant construction methods; how rigorous independent standards can provide confidence in flood products across the industry; how insurers can further increase their support for property owners installing flood resistant measures, particularly at the repair stage.

    According to the report a “one stop shop” advice web portal has been established to make it easier for people to find the most relevant information on better protecting their properties against flooding.

    This advice, which is targeted at homeowners, business owners and third parties including insurers, includes:  precautionary actions to take to better protect property from flooding; actions to take if property is in imminent danger from flooding; live flood warnings; recent case studies and research.

    In addition, the Association of British Insurers (ABI) has produced a new consumer guide to resilient flood repair which insurers are helping to circulate.

    Floods Minister Thérèse Coffey said: “The impact of flooding on people’s lives is not just financial, it can be emotionally devastating. This new action plan brings business and government together so it will be easier for people to take action to better protect themselves and their properties.

    “Our unprecedented £2.5billionn investment in flood defences will better protect 300,000 properties from floods by 2021.

    “But property-level measures are key to ensuring those who are unfortunate enough to suffer flooding can get back in their homes and businesses sooner and minimise the impact.”

    Dr Peter Bonfield, chair of the property flood resilience action plan added: “The Action Plan will help to give people and businesses the means to reduce the chances of their lives and livelihoods being disrupted by flooding. This is about both stopping the floodwaters getting in and speeding recovery when it does.

    “This action plan goes hand in hand with other recent announcements, like the broader National Flood Resilience Review. Both help ensure the country is better prepared for future flood events.”

    Insurers

    Director-General of the ABI Huw Evans, said: “Being flooded is horribly traumatic, not only because of the immediate devastation, but because drying out and repairing badly affected properties can take

  • ‘Nigeria insurance industry to become number one in Africa soon

    ‘Nigeria insurance industry to become number one in Africa soon

    The Nigerian insurance industry would soon become the number one in Africa, outgoing Commissioner for Insurance, Fola Daniel has said.

    This according to him is based on the fact that there is huge potential for growth in the country.

    He made this statement yesterday at the opening of the Insurance Industry Consultative Council (IICC) mega conference held in Abuja. The conference featured over 500 delegates across the iindustry in Nigeria, Africa and abroad.

    He said the industry also has the potential to be a major driver of advancing national development through freeing Government dwindling resources usually deployed to mitigate losses to citizens arising from natural calamities.

    Daniel who delivered the keynote address at the conference which has the theme “Developing Insurance Business for National Growth said for industry to play the above role, it must build its financial and technical capacities to take on large and specialist risks, such as flood, drought, aviation, terrorism and other similar risks.

    He noted that the insurance is one of the most cost effective mechanism for absorbing shocks and thus key to accelerating and sustaining economic growth.

  • DANA: Insurance chief hails claims payment to victims’ families

    DANA: Insurance chief hails claims payment to victims’ families

    The Commissioner for Insurance, Mr. Fola Daniel, on Thursday, commended the local insurance industry on the payment of claims to families of victims of the crashed Dana Airline.

    Dainel, who gave the commendation in Ilorin at a seminar for finance and business editors, said that all beneficiaries were being paid their entitlements.

    “On the Dana claims, we are doing well, if anybody has not received claims, it is due to problem of documentation,” he said.

    Daniel said that 70 per cent of the claims were being handled by foreign companies, while 30 per cent were being done by Nigerian companies.

    He alleged that the payment was nearly marred by crisis as some people came up with frivolous affidavits to support claims that were not due to them.

    The commissioner said that insurance was still considered elitist in Nigeria as very few persons in the urban centres subscribed to insurance policies.

    He said the insurance industry in the country had a lot of potential to grow if the business was encouraged at the grass roots.

    Daniel said that in the bid to develop this potential, the National Insurance Commission was in the final stages of developing a framework for micro insurance in the country.

    He said that the exposure draft of the framework had been released for inputs from stakeholders.

    “If we explore the potentials we have, the size of insurance industry can be 10 times the size of the banking industry,” the News Agency of Nigeria quoted the Insurance chief as saying at the forum.

    He said the insurance industry could improve its income tremendously if the potentials in the oil and gas sector were also tapped.