The resilience of the insurance industry in Nigeria is a mark that keeps the industry still standing with firm grip on its risk tending operations despite the several swoon the economy has witnessed. Giving credence that it is the midwife of the economy, providing the platform for others to venture out to create wealth.
Insurance market ability to stay put on its operations while other sectors are loosing growth points has made a cynosure for others but the exception it has earned has still not translated to full admission that the insurance sector is the enabler of all players in the economy, individual and corporate. While the market positions for gradual incoming that would translate to a swoop, it steady’s course on standing firm with present risks it midwifes.
The sector has demonstrated the ability to remain steady and unyielding downturn despite its relative size and outpacing the real economic growth, and this formed the fulcrum of the presentation of Umaru Baba, Assistant Director, Statistics Department, National Insurance Commission, on the “Performance of the Nigerian Insurance Industry 2017-2022, Facts Behind the Figures, to insurance correspondents at a recent retreat.
Baba’ establishing remark was a drop in, “The Nigerian insurance industry despite its relative size has proven to be one of the most resilient and fastest growing sectors in the Nigerian economy.”
Telling the story of the industry resilience NAICOM high calibre statistician said, “In the recent past especially, the last five-years, it defied several economic recessions and the effects of the global Covid-19 pandemic, at a period when other sectors of the economy pointed south.
“The market as measured by the industry gross premium income (GPI) has maintained a steady growth throughout the period of 2017 to the current,” he stated.
Insurance industry exceptionalism was demonstrated in 2020, and Baba said it was interesting the market recorded expansion in 2020 during the pandemic when the real GDP actually contracted (-1.9%) as was the case with most economies around the world.
The lift off vicissitudes of the economy while clutching good growth points by the local market was not only clear in Nigeria, it was significant compared to other African markets and emerging insurance market. NAICOM point man explain, “In 2021 for instance, while the annual rate of premium growth in Nigeria stood at 19.7%, it was 12% in Tanzania, 18.5% for Egypt and about 7.6% in the emerging insurance market of Malaysia.
Giving details of the industry performance he said the GPI maintained a steady rise except in 2020 but in the next year it too a v-shaped recovery thereafter, rebounded to about 20% in 2021. “In 2022, the GPI stood at N223.8bn in the first quarter, which was 6% growth on YoY and, N369.2bn in the second quarter, indicating a 65% QoQ growth and at about 20% YoY.
This performance he explained, apparently outpaced the real sector economic growth which grew at just about 3.5% during same period.
He hinged the growth on specific business drivers, his submission, “major drivers during the period of 2017-2021 were the special risk insurance of marine and aviation at about one hundred and seventy (169.6%) percent, miscellaneous insurance at 98.4% and life insurance at 71.3%. In 2022 however, fire insurance (32.5%) and life business (24.5%) recorded highest rates at the end of H1 period, YoY.”
Content Baba said available data has shown that the industry has sustained a higher growth rate than most other sectors of the economy and always higher than the real GDP growth.
For the market to sustain and improve on the current trend, he said the deepening drive which is already yielding results, must be unrelenting. He maintained that is the clear way to sustain the current rapid rate of insurance market growth which ensures economic growth, safety, stability, inclusion and development in Nigeria.