International Finance

Insurance sector on the right growth track

The life insurance business, which accounted for 43% of the sector's total premium income, grew by N48 billion to N309 billion in the fourth quarter of 2022

According to data from the National Insurance Commission (NAICOM), the insurance industry’s gross premium income climbed by 18% year-over-year (y-o-y) and 36% quarter-over-quarter (q-o-q) to N726 billion in the fourth quarter (Q4) of 2022.

The revenue from both the life insurance and non-life insurance sectors makes up the overall premium income.

According to FBNQuest analysts, the insurance industry has managed to remain resilient despite a number of macroeconomic headwinds, including high inflation, rising energy prices, and FX shortages.

The non-life industry maintained its market dominance in accordance with recent trends, with a 57% share of the overall premium income. Value-wise, the segment’s overall premium revenue rose 17% y-o-y and 34% q-o-q to N417 billion.

According to the data, the oil and gas industry contributed the most to the non-life business, with a share of 30%.

Fire insurance and motor insurance followed with shares of 22% and 15% respectively. Marine and aviation casualties, general casualties and others also contributed around 12%, 11% and 10% of total premium income, respectively.

The life insurance business, which accounted for 43% of the sector’s total premium income, grew by N48 billion (+18% y-o-y) to N309 billion in the fourth quarter of 2022.

On a cumulative basis, the insurance sector’s total premium income increased by 16% y-o-y to N1.9 trillion in FY22.

In terms of the sector’s market size, the data showed that total assets amounted to N2.3 trillion, an increase of 2% compared to the previous quarter and 4% compared to the previous year.

In terms of market size distribution of total assets, non-life business assets amounted to N1.1 trillion while life insurance assets amounted to N1.2 trillion. Based on the data, the sector’s insurance claims rose 31% sequentially to 318 billion naira in the quarter, accounting for 44% of total premium income.

Although the country’s insurance sector has continued to experience double-digit growth, there is a significant growth reason for the provision of insurance coverage to individuals, particularly those in the informal sector.

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