Fidelity bank banner NewsExpress advert
Hard times hit insurance firms; 23 out of 56 post losses

By Maduka Nweke on 24/07/2017

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 877


Nigeria’s effort to make the insurance industry perform its statutory role of mobilising funds for economic development continues to wobble as a recent report by Nigeria Insurance Digest has revealed that about 23 of the 56 insurance companies in the country recorded losses in 2015.

The report obtained from NIA showed that only 33 companies were able to surmount challenges of the economy during the period under review to register profits, prompting the Minister of Finance, Mrs Kemi Adeosun, to call for another round of recapitalisation for the industry.

The Minister noted: “To take true advantage of the opportunity in the industry, we must recapitalise and reposition the insurance industry. The top three banks have capital in excess of N300 billion each, but the top three insurers have capital of between N14 billion to N25 billion.” The last time that the capital bases of insurance companies was raised was in 2007 and recent economic downturn has eroded much of their capitalisation leading to poor business practices.

Some of the firms that posted losses are NICON Insurance Plc, N11.36 billion; Industrial and General Insurance Plc, N3.17 billion; Alliance & General Insurance Plc, N450 million; Alliance & General Life Assurance Plc, N171 million; ARM Life Plc, N529 million; Cornerstone Insurance Plc, N545 million and Custodian Life Insurance Limited, N176 million.

Recall that the National Insurance Commission (NAICOM) recently accepted and approved the  2016 financial accounts of 32 underwriting firms, an indication that a whole 22 other underwriters are still awaiting approval of the regulator.

According to a report by Agusto & Co, the Nigerian insurance industry underwrote risks of over N300 billion in 2015 through motor, oil and gas, general accidents, fire, marine, aviation, life insurance, among others as it estimated a 10 per cent growth in GPI in 2016.

The report reflected that at about 28 per cent GPI, over N100 billion generated was estimated to have been paid out as claims.

“This has helped businesses and individuals rebuild and recover from losses quickly. In addition, in terms of financial intermediation, it stated that operators in the sector invested over N137 billion of its premium in the banking industry as placements and deposits in 2015 while it estimates about N178 billion has been placed with the banking sector in 2016. The Insurance sector directly employs 6,400 persons and expended an estimated N29 billion in employee related costs in 2016,” it stated.

This was as analysts at Agusto & Co. pointed out that developments in the economy as a result of the slide in crude oil prices, which resulted to a downturn in government’s earnings and economic activities, also impacted negatively on the industry.

The insurance sector plays an important role in the development of any economy but has rather played a passive role in economic development despite its huge economic potential. Its challenges were further compounded by the economic crisis that lowered disposable income thereby making insurance consideration rank low in the budget of many families and businesses.

This was as the retail segment of the industry continued to record increasing withdrawals of insurance policies, due to declining earnings of the remaining clients patronising the industry. Moreover, an estimated 30 per cent of insurance firms have not yet presented their 2015 financial records, just as about 95 per cent of the companies recorded losses.

The development prompted the Minister of Finance, Kemi Adeosun, to advocate a fresh recapitalisation programme for the sector to enable them live up to its responsibility as capital bases of the insurance industry were last raised in 2007.

Meanwhile, the report the Nigerian Insurance Digest has revealed that about 27 insurance companies have remained relatively unknown by the Nigerian business community. The report noted that each of underwriters controlled less than one per cent of the industry’s market share.

According to the 2015 Nigeria Insurance Digest published by the Nigerian Insurers Association (NIA), Leadway Assurance Company Limited leads the industry with 14.93 per cent market share, followed by AIICO Insurance Plc with 10.93 per cent, while Axa Mansard Insurance Plc, holds 4.80 per cent. Custodian & Allied Insurance Plc has 4.59 per cent of the market while Mutual Benefits Assurance Limited has 3.37 per cent.

The Digest noted that Old Mutual Insurance Company Limited is leading the pack of firms with less than one per cent share, having 0.99 per cent market control despite its robust offshore affiliation. It is followed by Linkage Assurance, 0.98 per cent; Standard Alliance Insurance, 0.95 per cent; Ensure Insurance, 0.92 per cent; Great Nigeria Insurance, 0.88 per cent, Unity Kapital Assurance 0.85 per cent, Sterling Assurance 0.79 per cent, Equity Assurance, 0.79 per cent and Unitrust Insurance, 0.79 per cent.

Others include Prestige Assurance, 0.78 per cent; Alliance and General 0.76 per cent; Anchor Insurance, 0.75 per cent; Wapic Life, 0.39 per cent; Guinea Insurance, 0.28 per cent; Universal Insurance, 0.23 per cent; UNIC Insurance, 0.08 per cent; Spring Life, 0.01 per cent and Investment & Allied 0.00 per cent explaining why Nigerian underwriters still depend on foreign insurers for large ticket transactions. (Daily Sun)

 

Source News Express

Posted 24/07/2017 12:19:48 PM

 

Share on facebook Yahoo mail icon Gmail icon Share on Google+


 

CLASSIFIED ADS

REVEALED: 3 natural ways to get stronger erections, last 25minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...

 

You may also like...
Royal father frees 12 prisoners in Niger State...

State of emergency to deepen Nigeria’s democracy —Akpabio...

We’ve learnt from our mistakes — PDP •Apologises...

Change comes with pain, sacrifice —Tinubu

It’s official: VICTOR MOSES FIT AGAIN, set to...

NIGERIA WINS Muslim MISS WORLD BEAUTY CONTEST

Senate finally passes 2018 budget, increases oil benchmark...

Amaechi abolishes discriminatory school fees in Rivers •He’s...

2-year-old Nigerian girl kicked to death in Britain...

Nigeria’s foreign reserves drop to $24.74bn

Fire destroys N2 billion property in Onitsha

Nigeria’s Air Force Bases under threat: Chief of...

 

Latest News BREAKING: Real Madrid beat Liverpool in 2018 Champions League final EFCC begins probe of Obasanjo's $16bn power projects 30th May will witness a total lock-down of South East, South South - IPOB Police Recruitment: JAMB screens 37,000 candidates in 156 CBT centres Armed bandits kill community leader in Benue JOHESU appeals court judgement ordering it to suspend strike Anti-graft fight: We need support, not condemnation — FG If you use your powers negatively, posterity will haunt you - Jonathan tells Buhari Military confirms fire incident at Conoil fields in Bayelsa MeCAM laments effects of wanton killings on Nigerian children, tasks FG IDPs rape report: Stop living in denial, HURIWA tells FG 2018 African Brand Congress to hold in Nigeria

 

Most Read Nigerian female sex addict opens up, says ‘I like it with both men and women’ (346,007 views) NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (342,950 views) Shameless Genevieve Nnaji exposes breasts in public (274,121 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (225,374 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (205,622 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (203,450 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (177,486 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (159,765 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (150,660 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (144,012 views) Lagos plane crash: Journalist releases victims’ names (140,406 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (132,801 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (43) Business & Economy (3,163) Business Verdict (43) Columnists (858) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (498) Features (598) Global Business Monitor (275) International (1,974) Interview (149) Live Commentary (28) Love Matters (120) News (35,633) Opinion (973) Pidgin (10) Politics (5,079) Religion (747) Sports (1,519) Stock Watch (29) AMA & Al Jazeera Global Update

 

CBN banner

Firstmobile banner

 

 

NEWS EXPRESS TV

Boko Haram commanders surrender

 

APO Group Partner

 

 

CLASSIFIED ADS

REVEALED: 3 natural ways to get stronger erections, last 25minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement