Nigeria’s increasing economic activity, the country’s insurance industry’s gross premium in 2022 is expected to surpass N700 billion. This was disclosed by Agusto & Co. Limited, a pan-African credit rating organization and business data specialist, in its 2023 insurance sector report named “The Nigerian Insurance Industry – Poised to Survive the Weak Macro Economy and an Election Year”. Agusto & Co. estimates that in FY 2022, the expected gross premium income for the Nigerian insurance business surpassed N700 billion while maintaining steady double-digit growth. Several reasons, such as good economic activity and more supportive regulation, contributed to the premium increase in the industry.
Insightful analysis of the current situation of the Nigerian insurance market and projections for its near future were included in the sector’s annual report for 2023. In addition, the report also provided insight into its future in this election year, despite persistent macroeconomic challenges. Payment of claims resulting from violence during the #EndSARS protest impacted the profitability of the industry in FY 2021, it observed. However, similar flows remained minimal in 2022 due to the non-recurring situation in the country.
NAICOM increases third-party auto insurance policy prices.
The rise in third-party auto insurance policy prices by the National Insurance Commission (NAICOM), the top regulator, on December 22, 2022, was recognized as one of the most significant highlights of the sector. The new premium for personal vehicles has been increased to N15,000, staff vehicles to N20,000, and freight trucks and general cartage to N100,000. It has also been increased to N5,000 for commercial tricycles and N3,000 for commercial motorbikes. Until recently, the base rate for this insurance was N5,000.
In addition to the updated insurance premium, it was noted that NAICOM had declared that the premium rate for a comprehensive vehicle insurance policy should be at least five percent of the insurance amount after taking into account any rebates or discounts. Agusto & Co. indicated that the policy should soften the increasing loss rates from the related business line and enable an increase in GPI in fiscal year (FY) 2023. Despite the fact that the policy had attracted some critiques, Agusto & Co. stated that this was the reality.
Many opportunities and partnerships await insurance providers.
More so, the political climate of Nigeria will be the determining factor for insurance providers during the fiscal year 2023. According to the analysis, the first half of 2023 will be dominated by campaigning for the upcoming elections, while the second half will usher in a new government and innovative approaches to fiscal and economic reform. The possibility of election-related violence represents a potential loss and a negative impact on insurance operators, particularly if it frequently occurs across several states.
Nonetheless, there will also be the potential to acquire new insurance deals from the government sector, particularly in the second part of 2023. Also, the firm stated that the industry as a whole should see a moderate performance in FY 2023 owing to the improving yield environment. Moreover, they believe that the industry will benefit from initiatives like the bancassurance model, which would allow insurance companies to form partnerships with banks to expand their presence in the retail sector.
The sector sees a surge despite challenging situations.
It was also revealed that the Nigerian insurance industry’s expected net claims for FY 2022 increased by a less moderate 13% compared to the prior year. In spite of this, inflation expectations persisted, having a negative influence on claims settlements, operational costs, underwriting costs, and even moderate profitability metrics. The company also acknowledged that the nation’s security lapses, infrastructure disruptions, and the repercussions of the #EndSARS protest showcased the value of insurance products, especially fire and overall accident policies.
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Insurance industry premium to reach N700bn. – The steady growth of the insurance industry has surpassed expectations. – Express your point of view.
This shows the insurance industry is also growing rapidly and sporadically. The premium of over 700 billion show people are now knowing about insurance.
Due to the growing economic activity in Nigeria, the country’s insurance market would see a significant increase in gross premium in the year 2022.
It is anticipated that the Nigerian insurance industry’s gross premium income will exceed N700 billion while continuing consistent growth in the double-digit percentage range.
The rise in premiums in the sector can be attributed to a number of factors, including healthy economic activity and regulations that are more accommodating to business.
The annual report for the insurance industry in Nigeria for the year 2023 includes an insightful analysis of the current state of the Nigerian insurance market as well as estimates for its immediate future.
As a result of the one-off nature of the circumstances in the country in 2022, comparable flows were kept to a minimum.
The policy ought to mitigate the growing loss rates from the associated business line and make it possible for a rise in GPI in the upcoming fiscal year.
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The #EndSARS protest and its ramifications served to highlight the importance of purchasing insurance, particularly fire and comprehensive accident coverage.
The steady growth of the insurance industry has surpassed expectations. Every business need to grow. Good for the insurance company for their growth
The increment experience in the insurance industry in the few years is due to the awareness of people to insure incase of unforseen circumstances and it happen allover the world.
With this significant growth in the insurance industry it is more evident that the sector has great potential that can be harnessed further for more development and contribution.
The Nigerian insurance market is predicted to continue growing at a double-digit rate, with gross premium income reaching over N700 billion.
Increasing premiums in the industry can be linked to several factors, including the sector’s general success and the relaxation of some rules.
In recent years, the insurance sector has seen growth due to an increased global awareness of the need to prepare for the possibility of financial loss brought on by calamities that are beyond their control.
Since election-related violence causes loss and a negative impact on insurance operators, all activities should be suspended until after election if possible.
This show the insurance company is doing well and evolving well the industry surpassed expectation more awareness should be made so people should get to know about it more
The growth seen in the insurance industry is expected to happen as more people get a better understanding of how the insurance company works. It is not surprising that their premium was able to reach N700bn.
This is not surprising because many more people are having better understanding of our insurance work and are willing to invest in it. The increase made by NAICOM in the premium also contributed the steady growth.
Several variables, including as robust economic activity and rules that are more business-friendly, can be blamed for the increase in premiums in the industry.