BY FESTUS OKOROMADU
The National Insurance Commission of Nigeria says operators in the sector paid out a total of N182.6 billion as claims in the second quarter of 2023.
The figure represents 70.5 percent of gross claims reported during the period as gross claims stood at N258.9 billion or 47.0 percent of all premiums generated in the quarter.
This is according to the second quarter industry report posted by the Statistics Department of National Insurance Commission, Abuja on its website.
The report attributed swelled gross claims for the period to increased public enlightenment with regards Insurance merits and continued improvement in claims management as well as growing consumers’ confidence in the sector.
It added that the development calls for faster relative growth in premium generation and adequate rate quoting.
A breakdown shows that the Life Insurance business recorded an almost perfect point of 93.5 percent claims settlement ratio against the reported claims while the non-life segment stood at 56.4 per cent.
“The pattern of the percentage claims settlement was a direct replication of the market retention view, in all classes the ratio of net claims paid recorded an above average position against the figures except again, for the Oil & Gas business (44.4 percent).
“The Motor Insurance business reported an exceptional ratio of 88.6 percent of net claims paid against gross claims while Marine & Aviation businesses followed at about seventy-five (74.7 percent) albeit, seven points less than its position of the previous corresponding period of the preceding year.
The General Accident (69.1 percent), Miscellaneous (65.1 percent), and Fire (60.5 percent) stood at a relative stability compared to the preceding period,” the report stated.
Meanwhile, performance in the Oil & gas portfolio continues to lag owing to obvious technical and financial inadequacies in the industry, additional short-term measures are sure necessary, aside the ongoing recapitalisation drive and the local content enforcement to reverse the massive capital plight in that corner of the market.
In terms of profitability of the sector, the report shows that the Insurance market remained profitable during the period under review, recording an overall industry net loss ratio average of 52.9 percent.
This is as the Non-Life segment’s loss ratio stood at 50.5 percent while Life business recorded a net loss ratio of 55.5 percent during the same period.
The net loss ratio of the overall market average has demonstrated an improved market image at a five-point position, compared to the corresponding period.
However, those were the market average and of the two segments respectively as mentioned while the drivers of the net loss ratio during the period consist of some seven underwriters with a record of 100 percent and above.
Nonetheless, the overall profitability of the industry and its outlook especially, remains good and suitable for gainful returns on investment.