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The Nigerian insurance sector saw its growth more than tripled in the third quarter of 2022 on the back of dollar premium income and growth in annuity business.
According to latest data from the National Bureau of Statistics (NBS), the insurance sector rose to 19.09 percent at the end of third quarter 2022, as against 5.10 percent in the same period in 2021 and 6.09 percent in Q2 2022.
Industry analysts said the insurance industry has shown strong resilience, compared to a lot of other sectors.
According to them, the life insurers, particularly new entrants into the business, are taking up large annuity portfolios, which boost the growth of the sector, and there are a lot of partnership arrangements with non-insurance actors that are increasing uptake for insurance.
Mayowa Adeduro, managing director/CEO of Tangerine Insurance, said the growth in Q3 2022 was propelled majorly by the depreciation of the naira, which boosted dollar premium of the industry.
According to him, growth in annuity from life companies due to increasing number of retirees from pension scheme can also be attributed to the growth of the sector.
Edwin Igbiti, chairman of Insurance Industry Consultative Council (IICC), said the insurance industry is one of the most resilient and fast-growing sectors in Nigeria.
"You will agree with me that there has been growth in the industry despite the numerous economic recessions, the effects of the COVID-19 and the #ENDSARS protests, which resulted into millions of claims," Igbiti said.
While urging support for more awareness on the benefits of insurances, he said as the industry witnessed expansion, there was a need to keep promoting awareness for the good of the common goal of the industry and the economy at large.
Muda Yusuf, chief executive officer of Centre for the Promotion of Private Enterprise, said insurance can really do much in the economy, if given the need attention by the government.
He therefore called on Federal Government to set aside a minimum of 2 percent annual non-debt expenditure for insurance premium.
Yusuf made the call in his presentation entitled '2023 Budget And Insurance Industry' at the 2022 Insurance Industry Consultative Council Media Retreat held in Ijebu Ode recently.
He said for Federal Government to meet its insurance obligation as the highest spender, at least a minimum of 2 percent must be set aside for insurance premiums annually from the non-debt expenditures.
Yusuf, who emphasised the need for the decentralisation of insurance premium payment at the federal level, said the 2023 Ministries, Departments and Agencies (MDAs) budgetary provisions for insurance premium, compared to the total budget for the year, "is grossly inadequate".
Details of the budgetary provision for insurance premiums of some of the government MDAs, according to him, showed that the Head of Service with a total budgetary allocation of N8.4 billion, set aside N16.3 million (1.9 percent) as insurance premium; the Economic and Financial Crimes Commission, with a total budgetary allocation of N43.2 billion, will pay 213 million (0.5 percent) as an insurance premium for 2023; and the Federal Road Safety Commission (FRSC) will pay N250 million (0.5 percent) as insurance premium from a total budgetary allocation of N60 billion.
The Nigeria Police Force, with a total budgetary allocation of N805 billion, will pay N294 million (00.5 percent) for insurance premiums; Plant Quarantine allotted N37.8 million (0.14 percent) of the N27 billion allocation for insurance premium; the finance ministry, with a total budgetary allocation of N259.2 billion, only set aside N35.4 million (0.01 percent) for insurance premium; the ministry of works and housing, with a total budgetary allocation of N356 billion, set aside N5 million (0.001 percent) for insurance premium; the labour ministry allocated N5.9 million (0.06 percent) for insurance premium from a total budgetary allocation of N9.5 billion, and ministry of power, with a total N162.7 billion allocation, set aside N1 million (0 percent) for insurance premium.
Yusuf expressed regret that the pronouncement by the government that all government assets should be insured was yet to be implemented.
Yusuf said the MDAs do not even have any budgetary allocation for insurance premium adding that there are also concerns about the centralization of insurance premium in the Office of Head of Service.
He called on the stakeholders to take advantage of the window of opportunities offered by the Secretary to the Government of the Federation for increased budgetary allocation for insurance premium.
The industry's gross premium income in Q2 was N369.2 billion, indicating a 20.1 per cent growth rate compared to the same period in 2021.
Sunday Thomas, commissioner for insurance, said the statistics of the insurance market performance for Q2 revealed some quality improvements in the market indicators including growth, claims settlement and profitability.
"It is obvious that the market could be adjudged as sound and stable whilst, the stance of the market deepening remains optimistic," he said.
In terms of market size, the sector recorded an increased rate of growth of about 11.9 percent quarter on quarter with a total asset of about N2.3 trillion.Copyright BUSINESS DAY.