The dynamics of the insurance industry is changing with constant unlearning, learning and relearning in a continuous stream in the market year on year which has impacted on its profitability.
The current Bulletin of the Insurance Market Performance in the second quarter 2022 by the National Insurance Commission. In the published synopsis of the insurance market, the market was adjudged to be profitable despite its low penetration score. Its grip on current levels of businesses in non-life and life show a good score at the level of operation.
In its submission, NAICOM stated that, “the viability of the industry and, especially its outlook, remains good and suitable for gainful returns on investment.” Aiming for uninterrupted profit returns posted, the Commission added, “The ovid-19 crisis introduced opportunities for underwriters to refine their operations as there is still a lot of untapped potentials for improvements.”
The Bulletin stated, “The insurance market remained profitable during the period, recording an overall industry average of about fifty-seven (56.9%), maintaining a relative position (57.7%) recorded in the corresponding period of preceding year.”
The other side of the coin, loss experience, was not in a position to drum out the profit rating of the market but a concern to consider. The Bulletin’s overview, “The non-life segment loss ratio stood at 43.6% while the life business stood at 43.6% while the life business stood at about sixty-nine (68.5%) depicting a less profitable scenario comparatively, over the same period.”
The Commission picked out an emerging lesson from this, “The net loss ratios for non-life, bears an improved market image in the current period as compared to the preceding period when it was 48.2%.” The Commission noted that the “drivers of the loss experience” are made up of twelve (12) underwriters with a record of loss ratios above 100%.