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INSURANCE & PENSIONS

GEj’s Administration Favoured The Insurance Industry

Nigeria’s insurance industry recorded almost N1 trillion in Gross Premium Income (GPI) between 2011 and 2014.

The GPI, which amounted to N965 billion, grew by 14.8 per cent, from the N840 billion recorded within a period of 10 years before Jonathan took over as president in 2011.

Below is a breakdown of income recorded by the sector in Jonathan’s administration;
– N180 billion in 2011,
– N200 billion in 2012,
– N285 billion in 2013 and
– estimated N300 billion in 2014.

Before GEJ’s administration, the industry received N27.7 billion, N33.1 billion, N44.5 bllion and N55.9 billion premiums in 2000, 2001, 2002 and 2003 respectively. The insurance industry also pulled a total written premium of N69.4 billion, N76.3 billion, N82.3 billion and N100.6 billion in 2004, 2005, 2006 and 2007 respectively.

Commissioner for Insurance, Mr. Fola Daniel, said that the Nigerian insurance industry has witnessed tremendous changes in recent times owing to the new reforms embarked upon by National Insurance Commission (NAICOM). These reforms include the introduction of Risk Based Supervision, migration to International Financial Reporting Standard (IFRS) from the Nigerian Generally Accepted Accounting Principles (NGAAP) and Market Conduct Reforms.

The premiums also rose by 33.5 per cent from N150 billion in 2008 to N200 billion in 2009. Within the period, the underwriters also paid over N200 billion as claims to policyholders. A report by Agusto & Co had revealed that the GPI reached a record high of 63 per cent in 2008 and a record low of six per cent in 2010.

It said that although premium growth plunged in two successive years (2009 –2010) to single digit due to  the capital market crisis, which prevailed in the country, the industry rebounded slightly in 2011, to record a double-digit premium growth.
According to the study, “the industry’s dependence on brokers for large-ticket transactions, however, remains a major weakness of underwriters in Nigeria. This is exhibited in the high premium receivables recorded in 2011 as well as in 2012. We expect the “no premium no cover regulation” passed by NAICOM in 2012 to moderate premium receivables by the end of FY13.

“We view positively NAICOM’s plan to introduce the micro-insurance and Takaful insurance frameworks for the lower- income segment of the population before the end of 2013. We believe this should help insurance companies deepen their retail reach and market penetration going forward.

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Comments (9)

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