By LOVETH AZODO, Lagos
In 2023, the insurance industry in Nigeria faced both challenges and growth. In the third quarter, they got closer to their big goal of reaching N1 trillion. The report showed a significant increase in net claims paid, hitting N259 billion, up by 24.9% from the previous year.
Breaking it down, non-life businesses like oil and gas, fire, and motor were the main drivers, contributing a big chunk to the N729.1 billion Gross Premium Written (GPW). In the life insurance part, individual life and group life businesses played key roles, making up 36.4% and 34.5% of the total GPW, respectively.
Some important numbers tell us about the financial picture. The ratio of total claims to total premium was 50.1%, showing how important claims are. When it comes to paying claims, the industry paid 70.9% of reported claims overall. For non-life business, it was 55.0%, and for life business, it was a strong 94.9%.
The industry is big, with a total size of N2.8 trillion. Non-life assets are N1.74 trillion, and life assets are N1.0 trillion. Even though the industry hasn’t reached 1% penetration in the nation’s economy, it’s still a major player.
The culmination of discussions within the insurance committee outlined multifaceted strategies aimed at fortifying industry standards and driving transformation across various domains.
Central to these deliberations was the drive towards uniformity in issuing Brown cards across all countries, streamlining certificates to ensure consistency and efficiency. The regulatory spotlight shone brightly on risk-based supervision, emphasizing the imperative need for licensed agents and brokers, with a stringent call for updated licenses to foster a secure operational landscape.
Whistleblower policies surfaced as a critical directive, underscoring the significance of transparency and governance within insurance entities. Amidst these directives, the sector sought to expand awareness and build trust, specifically channeling attention towards the burgeoning annuity sector, visualizing a substantial inflow of funds from the pension industry.
The specter of unresolved claims loomed large, prompting regulatory nudges towards publicizing unsettled claims. The proposed platform under the NIE aimed to encourage claimants to engage with insurers, potentially resolving long-standing claims issues.
The industry’s roadmap, unveiled through KPMG’s insights, delineated strategic pillars encompassing regulatory enhancements, risk-based supervision, capital strategies, market conduct, and ethical paradigms. Moreover, partnerships with non-insurance sectors emerged as a highlighted avenue to amplify insurance outreach, echoing the successful models adopted by the banking industry.
Digitalization took center stage, signaling a paradigm shift towards technological integration while simultaneously recognizing the imperative need to bolster the talent pool and skill sets within the sector. Aligning insurance support with the national economic growth plan was underscored, emphasizing the industry’s role as a catalyst for economic development.
Anticipating future trajectories, a planned industry retreat sought to delve deeper into aligning insurance objectives with the national economic growth blueprint. Concurrently, discussions around regulatory amendments, IFRS 17 updates, and the imperative passage of the insurance bill were focal points.
Amidst this mosaic of discussions, the overarching emphasis remained steadfast on risk-based supervision and equitable capital deployment. While timelines for implementation were deliberated upon, the industry strived for a synchronized approach, galvanizing towards a shared vision for sustainable growth.
In essence, the Nigeria insurance industry in 2023 navigated a landscape teeming with regulatory imperatives, transformational roadmaps, and a collective endeavor towards fostering trust, transparency, and resilience, poised for a progressive evolution in the decade ahead.
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