The gradual recovery in the Nigerian economy combined with higher oil prices is beginning to show up in the numbers of insurers as their premium incomes spiked.
For the year ended December 2017, gross premium income for the 14 firms that have reported results spiked by 35.76 percent to N265.48 billion from N195.54 billion the previous year (2016).
Similarly, the cumulative gross premium income and net premium income were up 22.59 percent and 24.22 percent to N247.08 billion and N192.64 billion in the period under review from N201.55 billion and N155.02 billion the previous year.
The insurers are: Leadway Assurance Limited, FirstBank Insurance (FBN) Limited, Aiico Insurance Plc, AXA Mansard Insurance Plc, Wapic Insurance Plc. Mutual Benefit Insurance Plc, NEM Insurance Plc, Lasaco Insurance Plc, and Consolidated Hall Mark Insurance Plc.
Other are: Law Union and Rock Plc, Equity Assurance Plc, Continental Reinsurance Plc, Sovereign Insurance Plc, and Prestige Insurance Plc.
Experts are of the view that the performances of these firms reflect resilience deliberately imbued through a determined focus on portfolio diversification that broadens their revenue base.
The growth at the top lines means these firms have surmounted the headwinds brought on by lower oil price that resulted in severe dollar shortage.
In 2016, Nigeria slipped into its first recession in 25 years last as a battered cash flow hindered many firms from taking up a cover.
However, the country has existed a recession and it on the path of recovery, thanks to higher oil price and output, the relative calm in the Niger Delta region combined with a favorable foreign exchange policy.
The economy expanded 1.95 percent in the three months through March from a year earlier, according to a recent data from the office of National Bureau of Statistics (NBS).
The economy is forecast to grow 2.10 percent this year, according to the International Monetary Fund (IMF).
The recovery in oil price and an uptick in ports activities are expected to underpin oil and gas and Marine revenues of these insurers as many oil firms have gone back to the rigs.
Drilling down the figures shows Leadway Assurance Limited, the largest insurer by assets and premium, saw gross premium income increase by 60 percent to N84.46 billion in December 2017 from N52.70 billion the previous year.
The company said the major growth in revenue came from annuity business.
A breakdown of Leadway’s gross premium written shows revenue from life business surged by 94 percent to N61.28 billion in the period under review from N31.58 billion the previous year.
FBN Insurance Limited’s gross premium written surged by 91 percent to N23.09 billion in December 2017 from N12.10 billion the previous year.
Prestige Assurance’s gross premium income grew by 46 percent to N3.80 billion in December 2017 from N2.61 billion the previous year.
Sovereign Trust Insurance’s gross premium written (GPW) increased by 33 percent to N8.51 billion in the period under review from N6.40 billion the previous year.
AXA Mansard’s gross premium income rose by 30 percent to N28.82 billion in the period under review from N20.71 billion the previous year.
Experts say revenue of insurers can get a boost from an increase in Third Party Motor Insurance (TPMI) and that the current charge of N5000 is abysmally poor.
“I got my first car for N3000 in the 70’s and people still pay N5000 for TPMI,” said Peter Irene,” said Peter Irene, interim Managing Director/Chief Executive Officer, of International Energy Insurance Company Plc.
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