The Nigerian insurance industry, has in the past three years (2012 to 2014), maintained a progressive track in its overall performance as the industry’s assets within the period has continued to show significant growth from N646.635 billion in 2012, to N794?.680 billion in 2013 and N838.547 billion in 2014.
The industry’s gross premium for the period also maintained a steady growth track from N247.587 billion in 2012, to N267.835 billion in 2013 to N307.507 billion in 2014.
Similarly, the industry’s shareholders fund for the period grew from N2293.151 billion in 2012 to N267.835 in 2013 to hit N 349.374 in 2014.
Globally, the industry, occupied 58th position in 2012, maintained the same position in 2013 but in 2014, it was ranked the 61st industry in the global committee of insurance industries.
Disclosing this recently at the insurance forum, organised by the Access Bank in Lagos, Director General of Nigeria Insurers Association, the umbrella body of Insurance Underwriters Nigeria, Mr. Sunday Thomas said the industry is bedeviled with myriads of challenges.
He however said despite these challenges, the insurance sector is known to contribute to economic growth in the following different ways:
Promotion of financial stability and reduction of anxiety among economy operators, minimising government expenditure on aids and relieves.
He also said the industry has the capacity to facilitate trade and commerce; mobilise savings, manage risks efficiently, create jobs and reduces poverty as well as fosters a more efficient capital allocation.
In terms of individual company’s performance, Thomas said 55% of the combined market premium in the industry was produced by companies in the top 10 in 2014.
He further said the contribution of Life portfolio to the market premium is on the increase having risen to 37% in 2014.
“There is the growing interest in Takaful and Micro insurance businesses; Increase in public awareness of insurance policy initiatives; Technology is influencing product distribution
Regulatory pressure and oversight is on the increase
Price war as competitive device is still largely deployed to bid for businesses,” he stated.
He however said the largely untapped market within the industry creates opportunities.
According to him, the insurance industry in Nigeria presents a lot of growth opportunities due to the low insurance penetration.
He suggested that attention should be given more to the development of the retail market while waiting for corporate accounts’ rebound.
Speaking further on the opportunities in the industry, Thomas sated: “Insurance seem to have become investors delight given the difficulty in foreign remittances, it is expected that compliance with local content laws will increase.
Highlighting some of the challenges of the industry, Thomas stated: “Public patronage of the insurance industry is yet to reach the desired level notwithstanding the various legislations enacted to promote patronage.
“Inadequate enforcement of compulsory insurances; failure by the government to lead by example inadequate budgetary provisions for the insurance of government assets as well as under utilisation of capacity in the real sector.