In­sur­ance sec­tor still lags be­hind – Agusto & Co

Daily Trust - - BUSINESS - From Chris Agabi, with agency re­port

The Nige­rian in­sur­ance in­dus­try has re­mained re­silient amidst an in­creas­ingly com­pet­i­tive do­mes­tic mar­ket and height­ened reg­u­la­tory over­sight, a re­port has shown.

But while the re­port stated that the in­dus­try’s Gross Pre­mium In­come (GPI) grew by 19 per cent over prior year, it re­vealed that in­sur­ance pen­e­tra­tion ra­tio was still be­low one per cent and lags be­hind the BRIC coun­tries with Brazil hav­ing 3.65 per cent; Rus­sia at 1.29 per cent; In­dia at 3.82 per cent and China at 2.98 per cent.

This was re­vealed in a lat­est re­port on the sec­tor re­leased by panAfrican credit rat­ing agency, Agusto & Co. in La­gos.

How­ever, the Na­tional In­sur­ance Com­mis­sion (NAICOM) has repo­si­tioned to re­verse this trend with N1 tril­lion in­dus­try pre­mium in­comes in 2017 and in­creased trac­tion of the Mar­ket De­vel­op­ment and Re­struc­tur­ing Ini­tia­tive (MDRI).

This year, the Nige­rian in­sur­ance in­dus­try marked its first fi­nan­cial year since the im­ple­men­ta­tion of In­ter­na­tional Fi­nan­cial Reporting Stan­dards (IFRS).

In­sur­ance oper­a­tors faced dif­fi­cul­ties in im­ple­ment­ing the IFRS due to short­age of skilled hu­man cap­i­tal as well as tech­nol­ogy gaps. As at Jan­uary 15, 2014, only 44 out of the 59 in­sur­ance oper­a­tors had their 2012 fi­nan­cial ac­counts ap­proved by NAICOM.

Agusto & Co. es­ti­mated that com­pos­ite un­der­writ­ers (though only 8 in­sur­ers) con­trib­uted about 42.9 per cent of gross pre­mium in­come (GPI), while non-life un­der­writ­ers (com­posed of 22 in­sur­ers) ac­counted for 43 per cent of In­dus­try’s GPI.

The mar­ket share by com­pos­ite in­sur­ers was sup­ported by firms’ abil­ity to un­der­write both gen­eral and life in­sur­ance busi­ness.

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