The total gross premium income in Nigeria’s insurance industry has remained stagnant at 521 billion naira in 2021 compared to 592 billion naira from the previous year. The 2022 industry report by Agusto & Co states that this could be attributed to the negative effect of the COVID pandemic and the destruction witnessed in some parts of the country during and after the END SARS protests. (See report here)
The Nigerian Insurers Association also says that insurance companies have paid out compensations totalling 9 billion naira to victims of the post-END SARS protest chaos. in this same period. Business Edge for this day explores the insurance outlook for 2022 with Ayokunle Olubunmi, Head of Financial Institutions and Ratings at Agusto & Co.
First, the numbers. Overall, there were 99 claims settled on malicious damage, 8 on business interruptions, 455 on burglary attacks and 912 on fire and burnt sites. There were 718 settlement claims on vandalism, 93 claims on looting, 113 on theft as well as 136 on loss of cash. What this means is that events and the general status of the country have a direct link with the fortunes on the insurance industry. In the words of Olubunmi, “When the economy prospers, the financial industry also records good performance. Also when the economy is challenged, you see the impact on the insurance industry.”
He adds also, that in recent times, the gross premium revenue flowing into the insurance industry has been on the rise, there’s still a lot to be done to make insurance as mainstream as other financial services in Nigeria; especially as the majority of Nigerians are indifferent towards the idea of insurance until a catastrophe happens to them. The number of Nigerians who have some form of insurance cover pales significantly in comparison to those who do. This he says, is due to a number of factors, including inadequate awareness and education to citizens of the importance of having insurance cover; non-enforcement of certain insurance policies and lack of trust and transparency.
For the industry to grow, insurance professionals must consolidate their efforts not only to educate consumers but also to make the sector work seamlessly by embracing technology in the delivery of its services.
Watch Business Edge with Tolulope Adeleru-Balogun and Ayokunle Olubunmi above as they discuss Nigeria’s 2022 insurance outlook.
