Insurance industry assets rise 6.3% to N2.4trn in Q1 2023

By Cynthia Ezekwe

The insurance  industry recorded total assets of N2.437 trillion, representing a 6.3 per cent growth compared to N2.292 trillion reported in the first quarter of 2022.

The National Insurance Commission (NAICOM) made the disclosure in its first quarter report on the Nigerian insurance market, noting that statistics from the first quarter of 2023 indicates that the market was sound, stable and profitable during the reviewed period.

“In cognisance also to the on-going digitisation process and market deepening measures, the outlook could only be better as the industry continues to professionalise its process and regulatory measures strengthened through the full transition to risk-based supervision of the industry,’’ the NAICOM report added.

According to the report, the total Insurance claims during the first quarter has recorded a significant decline at 35.4 per cent Year-on-Year (YoY) to a close of about N86.8 billion, signifying a major stability in the polity compared to the same period of the preceding year when the economy was still recovering from post COVID-19 pandemic and socio-economic and political crisis of the ‘ENDSARS’.

The report also noted that gross claims stood at a comfy ratio of 28.6 per cent of all premiums generated during the period while the net claims paid on the other hand was recorded at N182.2 billion representing about 79.9 per cent of gross claims reported during the period under review.

According to the NAICOM, the market average for life insurance business recorded a near perfect point of 91.0 per cent  claims settlement against all reported claims during the first quarter while the non-life segment stood at 69.5 per cent during the same period.

“The trend of the claims settlement ratio against reported claims was a direct reflection of the market retention view, significantly above average for all classes with Motor insurance leading at a ratio of 94.4per cent. This is followed by general accidents (80.8%), miscellaneous (73.4 per cent), Marine (68.0 per cent ) and Fire (56.4 per cent) posting some significant ratios of paid claims against reported claims during the period,’’ the report added.

It noted further that the industry recorded a roundly profitable occasion during the period, recording an overall market average loss ratio of 38.1 per cent, about 18 points higher compared to the preceding year, adding that the net ratio of the life insurance was 42.6 per cent, while  non-life stood at a much profitable record of 33.7 per cent.

“The market, especially in its non-life segment has sustained its good profitability standing which is good for investors’ assurance and customer confidence as only profitable ventures are sustainable and could easily settle policyholders’ obligations,’’ the report stated.