Breaking News
NIA Chairman: Insurance Premium Will Hit N2tn in 2025
EbereNwoji
Insurance sector operators have said that despite negative factors such as general increase in operational cost and increasing shortage of some required skills which the sector is currently grappling with, they would overcome these challenges and deliver over N2 trillion premium by the end of the 2025 business year.
This position was expressed by the Chairman, Nigeria Insurers Association (NIA), Mr. Kunle Ahmed, in an exclusive chat with THISDAY.
NIA is the umbrella body of all the insurance underwriting firms in Nigeria.
Ahmed said signs of this tremendous growth anticipated at the end of the year was glaring at the performance of some operating firms in the Q1 of the year.
The insurance sector in the year 2024, raked in N1.17trillion premium thus growing its premium by 61 percent from N1.003 trillion premium of 2023.
The year 2023 was when the insurance sector realised its tall dream of transforming itself to a trillion Naira premium income market from N164 billion margin it was in the year 2009 when it set the target.
By implication it took the sector 14 years to realise the dream, a situation which the operators attributed to many negative factors plaguing the sector.
But the NIA Chairman, Ahmed, speaking on the performance of the industry in the first six months of the year, said the insurance industry has in the last five months witnessed some tremendous growth that showed that by the end of this year its premium income would hit N2 trillion mark.
Using the first quarter unaudited result of quoted companies in the sector as a barometer to measure the growth, Ahmed said some companies recorded more than 40 percent growth in revenue.
“The growth recorded will be better appreciated when viewed from the fact that the influence of currency devaluation has reduced considerably compared to last year, due to the relative stability of the Naira this year. “The changing market dynamics, increasing creativity of underwriters coupled with the drive for the enforcement of compulsory insurances, especially the third-party motor insurance are some of the factors responsible for the growth”, Ahmed pointed out.
On some of the challenges met at this period by the sector, Ahmed said despite the growth recorded, operators have noticed an increase in the request for short term cover by customers instead of a full year cover.
He said this has been caused by inability of some members of the insuring public to pay one year premium from policy inception.
According to him in some instances some policies are yet to be renewed. He said this showed that insurance companies, like all other companies are still grappling with general increase in operational cost and increasing shortage of some required skills.
The NIA Chairman however said there was great hope for the industry in the remaining part of the year as the enforcement of the Third-Party Motor Insurance by the Nigeria Police Force, which commenced on February 1, 2025, was generating significant effects on both the insurance industry and policyholders in Nigeria.
“The most immediate and significant impact is the substantial increase in the purchase of third-party motor insurance policies. This surge in demand directly translates to higher premium income and overall revenue growth for insurance companies.
“Available reports indicated a significant increase in the uptake, and this trend is expected to be amplified by continued enforcement in 2025 and beyond”, the NIA Chairman stated.
He however said the increase in uptake implies increase in the volume of claims and overall potential liabilities of insurance companies.
He added this would necessitate that insurance companies enhance their claims processing efficiency and customer service capabilities to handle the increased workload and ensure policyholder satisfaction.
“Stricter checks by the police make the use of fake or invalid insurance certificates riskier. This enforcement, coupled with the use of the Nigeria Insurance Industry Database (NIID), is expected to reduce the prevalence of fraudulent policies”, he stated.
