Nigeria insurance market has etched its capacity to lift and hold risks for the duration of business without fault lines on its financial limit, a firm and certain signature of the market.
This hallmark of the industry was captured in a presentation on the Performance of the Nigerian Insurance Industry: 2017 – 2022 – Facts Behind the Figures, to journalists at a recent retreat by National Insurance Commission, in Lagos.
“The market has proven resilience not only with regards to premium generation, but the capacity to retain businesses which signifies sound financial stability and carriage capacity,” this was the label of the Commission and relayed by the assistant director, Statistics Department, Dr Umaru Baba.
Baba stated that the performance of the retention capacity was in tandem with the gross premium income GPI growth. Unveiling the performance, he said it recorded a positive trajectory in business retention from N265.5bn to N441.2bn (66.2%) over the period of 2017 to 2021.
Narrating the score of risks retention, Baba said the retention growth was highest for marine and aviation, growing at 169.7% over the period while general accident insurance retention lagged at about 24.6% over the same period.
“This signifies the growing retention capacity by insurers as the aggregate five year retention ratio of the industry stood at 72.1% as the portfolios of motor (93.1%) and life business (91.8%) led the market,” he stated.
Comparing the Nigerian market with other climes on the basis of retention up and until 2020, Baba said the local score of retention ratio was 71.6%, which was higher than the advanced markets of Australia (69.4%) and Turkey (70.9%) and indeed the developing market of Egypt (58.1%).
In the current year (2022), NAICOM top statistician said the retention experience in the first half was no different from the previous years.
Splitting the business into two, Baba said the life business retention was 93% while non-life recorded a ratio of 55% as the industry average stood at about seventy-one (70.5%) percent.
For the other segment of the business, non-life, Baba said the stats indicate that this class stood at an average position except for the oil and gas (40.1%) even as it declined further compared to its retention capacity in the corresponding period (42.3%) of 2021.