The Nigerian insurance industry posted an impressive Gross Premium Written (GPW) of N813.1 billion in the second quarter of 2024, representing a 47.4% year-on-year growth and a 72.7% quarter-on-quarter increase, according to the National Insurance Commission’s (NAICOM) latest report.
The report, titled “Synopsis of the Insurance Market, Second Quarter, 2024”, highlighted the sector’s resilience amid macroeconomic challenges and its sustained growth trajectory since the beginning of the year.
Claims Performance Reflects Strong Consumer Confidence
The analysis revealed that the industry reported gross claims of N297.9 billion, accounting for 36.6% of total premiums and reflecting a 15% year-on-year increase. Net claims paid stood at N259.4 billion, representing 87.1% of gross claims, a testament to improved regulatory oversight and timely claims settlement.
Life insurance led the sector with a claims settlement ratio of 92.5%, while non-life insurance followed at 83%. Motor insurance reported the highest claims efficiency, with 95.3% of net claims paid, closely followed by marine and aviation at 95%, marking a substantial improvement from the 74.5% recorded in the same period last year.
Other segments, including general accident and fire insurance, maintained stability with claims ratios of 85.9% and 67.7%, respectively. The oil and gas segment also recorded commendable performance, settling 93% of claims despite its lower retention ratio of 32%.
Profitability and Market Concentration
The sector remained profitable, with a net loss ratio of 55.5%, an improvement from 52.9% in Q2 2023. Non-life business recorded a net loss ratio of 57.2%, while life insurance fared slightly better at 53.6%.
The report, however, highlighted disparities in market concentration. In the life insurance segment, the top three firms controlled 43.8% of premiums, while the top ten accounted for 86.6%, leaving the bottom ten players with just 1.3%. For non-life insurance, the top three companies held 34.8% of premiums, and the top ten underwriters managed 66.3%, leaving a marginal share for smaller players.
Industry Assets and Growth Outlook
Total industry assets reached N3.68 trillion, a 9.5% increase from Q1 2024. Non-life insurance accounted for N2.29 trillion, while life insurance contributed N1.39 trillion, showcasing robust growth across both segments.
Resilience Amid Challenges
Despite economic headwinds, the report lauded the industry’s resilience, citing effective risk management, prudent underwriting practices, and strong regulatory oversight as drivers of its performance. Key metrics, including premium generation, claims efficiency, and asset growth, suggest a positive outlook for the sector.
“The Nigerian insurance industry continues to demonstrate soundness, profitability, and stability. These achievements underscore its role as a critical component of the nation’s financial ecosystem,” the report concluded.
With a solid foundation and growing consumer confidence, industry stakeholders remain optimistic about sustained growth and further contributions to Nigeria’s financial inclusion and economic development.
