The Nigeria’s insurance industry generated a total Gross Premium Income (GPI) of N471.8 billion in the 2019 financial year as against only N400 billion recorded in 2018.
A report by Agusto & Co, a credit rating agency, disclosed that the premium income posted also boosted the profit made by operators in the financial year and points to a gradual increase in insurance acceptance in both formal and informal sectors of the economy.
According to the report, 48 per cent of the premium income came from non-life business, 36 per cent emanated from life business while 16 per cent came from annuity businesses of the companies.
A deeper analysis of the data revealed that while 73 per cent of the gross premium income came from corporate businesses, 12 per cent was from retail and 15 per cent from public sector.
On the basis of geographic distribution of the GPI the report showed that insurers gathered 83.6 per cent of the gross premium income from Lagos State; 6.6 per cent from Abuja, 2.4 per cent from Rivers State and the remaining 7.4 per cent from the remaining 34 states of the federation.
Accrding to the data, the GPI by distribution channels, the data showed that brokers generated 54 per cent of the premium, agents got 26 per cent, direct sales and bancassurance garnered 7 per cent respectively, e-channel got 0.4 per cent while other channels got 6 per cent.
The Head, Financial Institutions Ratings, Agusto &Co Nigeria, Mr. Ayokunle Olubunmi, who revealed this at an event in Lagos recently stated that though, there has been gradual rise in the premium income of insurance industry in the last few years, operators need to pay better attention to genuine claims settlement, as this remains a viable platform to increase insurance penetration and acceptance.
Olubunmi also disclosed that 500,000 Nigerians, specifically those in the informal sector, are now subscribers to microinsurance policy, despite the challenges facing microinsurance scheme.
He listed the challenges to include: “low level of education, developing a low cost operating model, affordability of microinsurance products, availability of staff with the requisite skills, low awareness and trust issues, developing products that meet the customer needs, inadequate data, culture and religious beliefs, negative perception about insurance, bottlenecks in obtaining approval for needed partnerships.”
He however charged insurers to harness the enormous untapped opportunities in the microinsurance sector to grow the insurance penetration level.
Earlier, the Chairman, Nigerian Insurers Association (NIA), Mr. Tope Smart, said, insurance operators have improved in the area of prompt payment of genuine claims, noting that the Association has persuaded its members on the need to honour claim obligations as, that is the reason underwriting firms exist.
Smart said the best form of insurance advocacy that operators can do is to pay claims, saying, the beneficiaries will spread the gospel of getting claims in insurance firms, thus, persuading more people to pick up insurance policies.