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By Henry Uche
The Nigerian insurance industry continued its growth trajectory, as total assets rose by 5.15% to N3.88 trillion at the end of the third quarter (Q3) of 2024, up from N3.69 trillion reported in the preceding quarter. This was revealed in the Insurance Market Performance Bulletin for Q3 2024, published by the Research and Statistics Department of the National Insurance Commission (NAICOM) on Monday.
The quarterly bulletin, which offers an analytical overview of the sector’s performance, highlighted robust growth in assets during the review period. According to the report, the non-life insurance segment dominated the asset pool, accounting for N2.34 trillion, while the life insurance segment contributed N1.54 trillion.
“The industry indeed has demonstrated a significant level of robustness, profitability, and stability,” the report noted, adding that this is evidenced by strong premium generation, favorable net loss ratios, substantial market expansion, and a competitive operating environment. The report further stated that these gains were bolstered by “ongoing regulatory policies focusing on sector-wide process automation, market deepening measures, and sustainable legal framework improvements.”
The industry also recorded remarkable growth in gross premiums written, which surged by 60.9% year-on-year and 44.3% quarter-on-quarter, closing at approximately N1.17 trillion. The non-life segment led the charge, accounting for 68.9% of the total gross premium, amounting to N808.4 billion, while the life segment contributed 31.1%, equivalent to N364 billion.
Non-life insurance, which covers motor, fire, general accident, marine, oil & gas, and miscellaneous policies, contributed significantly to the market’s premium pool. Within the non-life segment, oil & gas insurance emerged as the largest contributor, accounting for 35.2%, followed by fire insurance at 21.3%, and motor insurance at 14.4%. Other contributors included marine & aviation (12.4%), general accident (9.0%), and miscellaneous insurance (7.5%).
In the life insurance segment, Individual Life policies led the pack, contributing 41.8% of total life premiums, followed by annuity business at 31.8%, and group life insurance rounding out the remainder.
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The report also highlighted significant progress in claims settlement during Q3 2024, with gross claims reported reaching N564.1 billion, representing 48.1% of total premiums generated during the period.
The Life Insurance segment demonstrated an impressive claims settlement ratio of 81.6%, while the Non-Life segment achieved 73.6%. Notably, Motor Insurance led the claims performance with a remarkable 92.3% settlement ratio, followed by miscellaneous insurance at 88.9%, general accident at 86.3%, and fire insurance at 75.1%. The oil & gas segment, although lower at 63.7%, showed a marked improvement compared to the 43.1% reported in the corresponding period of 2023.
The industry’s overall net loss ratio average stood at 62.8%, reflecting its profitability during the period. The non-life segment reported a loss ratio of 66.7%, while the life segment recorded 57.4%, indicating a notable improvement in the latter’s market performance.
However, the report identified challenges, as 11 insurers reported poor net loss ratios, exceeding 100%. While these underperformers were not named, their struggles underscore the need for accelerated premium growth and better rate-setting practices across the sector.
The bulletin also analysed market concentration, revealing that the life insurance segment exhibited a higher level of concentration than the non-life sector. The top three life insurers accounted for 59.8% of total life premiums, while the top three non-life insurers controlled 33.3% of premiums in their segment.
“Additionally, 65.3% of all life insurance business was accounted for by the top ten players in the market during the quarter,” the report revealed. In comparison, the top ten underwriters in the non-life sector generated about 65.3% of total gross premiums, while the least ten companies contributed a mere 0.7%, reflecting a more balanced competitive landscape in the non-life segment.
Despite the uneven market distribution, NAICOM expressed confidence in the industry’s future, noting that ongoing regulatory reforms and strategic initiatives are driving stability and fostering growth. “Although the life segment proved less desirable, it is, however, only on a relative basis and not too exposed to market concentration risk vulnerabilities,” the report concluded.
