Insurance sector gross premium up 22% in Q3

Nigeria’s insurance industry at end of third quarter (Q3) 2018 grew its gross premium income by 22 percent, moving from N258 billion during the same period in 2017 to N315 billion.

The industry is expected to close the year with a significant leap in premium, Mohammed Kari, commissioner for Insurance/CEO, National Insurance Commission (NAICOM), said.

Kari made the disclosure during the End of the Year review workshop for insurance journalists in Lagos, weekend.
Represented by Sunday Thomas, deputy commissioner for Insurance, Technical at NAICOM, said the gross claims figure for Q3 2018 was N143 billion, a 30 percent increase over the N110 billion reported for the same period in 2017.

Going into 2019, he said the outlook might not be as rosy as we all would have liked, “but NAICOM sees the silver lining and is fully committed to making the most of it.”

Kari said, “We have set for ourselves a clear, unambiguous task: to improve the aggregate number of insurance consumer by enabling individual operators to optimally serve a much larger customer pool with a more varied basket of products. The end game for us is to increase the insurance uptake ratio among the Nigerian populace and we have a number of initiatives in place towards achieving this.”

According to Kari, financial inclusion is one of the tools the commission envisages to help improve market penetration. The initiative is premised on the fact that getting the mass of the financially excluded to embrace insurance in one form or another will have a positive impact.

He therefore charged the insurance companies to have a buy into the industry’s micro-insurance initiatives for the Nigerian market, saying, “The Takaful market is still grossly under accessed by the public, there is therefore the need for aggressive promotion in aid of financial inclusion”.

“In addition, efforts are being made to expand the distribution channels for insurance products because the traditional channels are becoming too restrictive and sub-optimal. Whereas Bancassurance has received the most attention, there are other initiatives to reach out to the public.”

The Commission has developed a guideline for the creation of State Insurance Producers (SIP), expecting that states participation in enforcement of compulsory classes of insurance will enhance compliance and deepening of the market, he said. “States will in the process create employment and enhance their internally generated revenue.”

Tope Smart, chairman, Nigerian Insurers Association (NIA) said the operators were putting initiatives in place to reach the unreached population of Nigerians.

He said with a 2.5 percent economic growth projection for 2019, and anticipated investment in infrastructure by government; insurers are hopeful to benefit from the insurance element.

Eddie Efekoha, president, Chartered Insurance Institute of Nigeria (CIIN), stated that among the issues that occupied public discourse in 2018 was the Tier Based Minimum Capital policy, stating “While I thank the Commission for deeming its fit to withdraw and cancel the policy the time they did,” the fall out was huge.
“It reawakened some of us who were sleeping; it has also wet the appetite of consumers who now have become more selective, and most importantly we have built greater capacity for our business,” he said.
He further noted that the growth of insurance industry rest in developing the retail market, stating the NAICOM enforcement of compulsory insurance through SIP speaks to this, while urging further engagement with agitated parties. “As an industry, we have traded to the limit of corporate insurance, so we must collaborate to grow the retail space.”

Eberechukwu Nwachukwu, managing director, NSIA Insurance who said she would not assess the industry in terms of numbers, said some growth was achieved in 2018 in terms of level of conversation and engagement, diversity and quality in product offerings, digital technology appreciation as well as the quality of people the industry was begging to attract.

Going into the future, she noted that what drive insurance is credit, calling on banks and other financial institutions to increase access to credit, as that will compulsorily attract insurance buying. This is what has boosted insurance uptake in other markets, Nwachukwu said.