Insurance Sector’s Total Assets Reach N3.88trn in Q3, Says NAICOM.

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The Nigerian insurance sector recorded significant growth in the third quarter of 2024, with total assets expanding by 5.15% to N3.88 trillion.

According to a report by the National Insurance Commission (NAICOM), the non-life business accounted for the majority of the assets at N2.34 trillion, while the life business’ assets stood at N1.54 trillion.

The report noted that the industry demonstrated “some significant level of robustness, profitability, and stability” during the quarter, with gross premium written rising by 60.9% year-on-year and 44.3% quarter-on-quarter to N1.17 trillion.

The non-life sector led the performance, accounting for 68.9% of the market share with a total volume of N808.4 billion, while the life segment accounted for 31.1% of the market premium aggregate.

A breakdown of the data showed that the oil and gas insurance portfolio led the non-life business with a 35.2% contribution, followed by fire insurance at 21.3%. Motor insurance accounted for 14.4%, while marine and aviation, general accident, and miscellaneous contributed 12.4%, 9.0%, and 7.5%, respectively.

In the life insurance segment, individual life business led with a 41.8% contribution, followed by annuity business with 31.8% and group life insurance with the remaining percentage.

The industry reported a rise in gross claims in Q3 2024, reaching N564.1 billion, which is representative of about 48.1% of the total premiums generated during the period.

The report highlighted the need for accelerated premium growth and appropriate rate setting, noting that the life insurance segment recorded an impressive claims settlement ratio of 81.6%, while the non-life segment achieved 73.6%.

The insurance sector demonstrated profitability during the period, with an overall net loss ratio average of 62.8%. However, 11 insurers reported a poor net loss ratio during the period.

The market concentration remained relatively unchanged, with the top three life insurance companies controlling about 59.8% of the total life premiums, while the top three non-life insurers controlled 33.3% of all the premiums generated in that part of the market.

The report concluded that the industry’s performance during the quarter was impressive, with significant growth in gross premium written and total assets. However, it noted that there is still room for improvement, particularly in terms of market concentration and profitability.

“The insurance industry has shown resilience and adaptability in the face of challenges, and we are encouraged by the growth in gross premium written and total assets,” said the Commissioner for Insurance, Sunday Thomas. “However, we must continue to focus on improving market concentration and profitability, as well as enhancing the overall efficiency of the industry.”

The report also highlighted the importance of technological innovation in driving growth and improvement in the insurance industry. “The use of technology has the potential to transform the insurance industry, making it more efficient, customer-centric, and competitive,” Thomas noted.

In terms of market share, the top 10 life insurance companies accounted for 65.3% of the total life premiums, while the top 10 non-life insurers accounted for 65.3% of the total non-life premiums. The report noted that this concentration of market share among a few large players could potentially lead to reduced competition and innovation in the industry.

To address this issue, the National Insurance Commission (NAICOM) has been working to promote greater competition and innovation in the industry. “We are committed to creating a level playing field for all insurance companies, regardless of their size or market share,” Thomas said.

The report also highlighted the importance of risk management and solvency in the insurance industry. “Insurance companies must prioritize risk management and solvency in order to maintain the trust and confidence of their policyholders,” Thomas emphasized.

Overall, the report provides a comprehensive overview of the insurance industry’s performance during the third quarter of 2024. While the industry has made significant progress in terms of growth and innovation, there are still challenges that must be addressed in order to ensure the long-term sustainability and success of the industry.

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