… As NIA Identifies Fire, Oil, Gas, Motor Insurance As Major Contributors

Amaka Obiefuna

 

The Nigeria Insurance Industry has reported a revenue generation of N1.2 trillion and N3.9 trillion of total assets at the end of September 2024, demonstrating a healthy expansion despite a rise in the net loss ratio in quarter two (Q2) 2024 compared to quarter one (Q1)

 

Chairman of NIA, Mr. Kunle Ahmed, in the first quarter media chat held recently in Lagos, noted that the Nigerian insurance market remained profitable overall, attributing significant contributors to Fire, Gas, Oil and Motor Insurance.

 

He disclosed that while specific data for the entire year of 2024 was still being consolidated, the available data up to the end of third quarter (Q3) 2024 indicated robust growth in gross premiums as he announced a report of 61 per cent year-on-year increase in Q3 2024, reaching N1.2 trillion from the regulator.

 

“This growth was largely driven by the non-life insurance sector, which constituted approximately 69 per cent of the total premium income.

 

“Within the non-life business, Fire, Oil & Gas insurance were significant contributors to the increased revenue. All non-life business products showed robust quarter-on-quarter growth”, the report indicated.

 

Also the life insurance business experienced substantial growth, with the report indicating a 45 per cent quarter-on-quarter increase in Q3 2024. “Group Life emerged as the largest premium-generating component within the life segment”, the report stated.

 

He further disclosed that the stricter enforcement of Third-Party Motor Insurance by the Nigeria Police Force, which commenced on February 1, 2025, is generating significant effects on both the insurance industry and policyholders in Nigeria.

 

The NIA Chairman explained that the most immediate and significant impact is the substantial increase in the purchase of third-party motor insurance policies.

 

He emphasised that this surge in demand directly translated to higher premium income and overall revenue growth for insurance companies, stating that available reports indicated a significant increase in the uptake, “and this trend is expected to be amplified by continued enforcement in 2025 and beyond.”

 

Ahmed however, pointed out that the increase in uptake implies increase in the volume of claims and overall potential liabilities of insurance companies, which will necessitate that insurance companies enhance their claims processing efficiency and customer service capabilities to handle the increased workload and ensure policyholder satisfaction.

 

Commenting on the Nigerian Insurance Industry Reform Bill 2024, he described the Bill as a timely and necessary step to bring the legal framework in line with contemporary challenges and international best practices.

 

He posited the Bill is a significant piece of legislation aimed at overhauling the regulatory framework of the insurance sector in Nigeria. “My reaction to this bill is largely positive, as it appears to address several long-standing issues and aims to modernise and strengthen the industry for the benefit of all stakeholders.

 

“The existing Insurance Act of 2003 is outdated and does not adequately address the current realities and evolving needs of the Nigerian insurance market”, the NIA Chairman noted.

 

On the proposed significant increase in the minimum capital requirements for insurance companies (non-life: N15 billion, Life: N10 billion, Reinsurance: N35 billion), Ahmed said it will enhance the financial capacity of insurers to underwrite larger risks, improve their solvency, and increase public confidence in their ability to meet obligations, adding that it also aims to improve the industry’s retention capacity and reduce reliance on foreign reinsurance.

 

Continuing, Ahmed stressed that the Insurance Industry recognises the immense opportunities presented by the African Continental Free Trade Area (AfCFTA) and that plans are at an advanced stage to explore them.

 

He said: “NAICOM spearheaded the creation of the Nigerian Insurance Industry Committee on AfCFTA (NII-AfCFTA Committee) in May 2022 to coordinate the industry’s strategic response to AfCFTA. The Committee’s mandate includes liaising with the National Action Committee on AfCFTA and other relevant bodies to actualise the immense benefits under this arrangement.

 

“The NII-AfCFTA Committee, with the support of NAICOM, had organised workshops and enlightenment programmes for insurance operators, brokers, and loss adjusters to raise awareness about the opportunities and challenges of AfCFTA and to strategise for effective participation.”

 

A key focus of this initiative, according to him, is on developing insurance products that cater to businesses operating across multiple African countries which include coverage for trade, investments, and multinational clients. “The industry aims to capitalise on the AfCFTA’s Trade in Services protocol, which offers opportunities for increased financial integration and cross-border operations.

 

“Currently, Nigerian insurers are considering establishing commercial presence in other African countries to tap into new markets directly. NAICOM has urged Nigerian brokers, loss adjusters, and insurers to improve their value proposition, professionalism, and service delivery to remain competitive in the expanded African market”, Ahmed disclosed.