Fidelity bank banner UBA banner
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: 1,055


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

 

You may also like...
Killers of Bayelsa cattle merchant, workers won’t go...

No one can rig 2019 elections, Ekweremadu assures...

Benue killings: Banning herdsmen unconstitutional, retrogressive, primitive —...

El-Rufa'i appoints Amirul Hajj, saves N221m from sponsorship...

Udoma gives condition for success in producing a...

Anambra, Adamawa, Ogun, Akwa Ibom and Kebbi Governors...

FG announces $1m venture capital to boost creative...

Presidential panel to recover $7bn bailout funds from...

Nigeria’s busiest airport, MMIA, up in flames

North-East Senators reject imposition of Senate President

Bauchi sacks SUBEB Management over delay in payment...

2015 Elections: A Time to Choose (3); Focus...

 

Latest News 40 killed in Kaduna Nnamdi Kanu’s reappearance, the beginning of Biafra’s independence — IPOB Be wary of Agatu girls, LG boss warns NAF personnel Unpaid Pensions: 900 Nigeria Airways retirees die Atiku’s Campaign Council: Umahi denies rejecting appointment Fayose won't be intimidated, ready to defend himself in court — Aide Viral Video: NANS gives Buhari 7-day ultimatum to probe Ganduje Anambra Building Collapse: Last trapped victim dies after rescue Lebanese jailed, forfeits $52,550, €32,250 to FG Why Abia women prefer fairly-used underwear Osinbajo declares Bayelsa flood a major disaster •Dickson calls for collaboration to resettle victims Alleged 2.1bn Fraud: Charge Dasuki for money laundering not me, Dokpesi tells court

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (407,648 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (382,914 views) Shameless Genevieve Nnaji exposes breasts in public (315,251 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (258,023 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (237,815 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (224,601 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (204,381 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (185,833 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (170,596 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (166,059 views) Lagos plane crash: Journalist releases victims’ names (161,711 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (149,474 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (69) Business & Economy (3,696) Business Verdict (52) Columnists (948) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (559) Features (660) Global Business Monitor (304) International (2,547) Interview (165) Live Commentary (28) Love Matters (145) News (39,754) Opinion (1,125) Pidgin (13) Politics (7,304) Religion (881) Sports (1,733) Stock Watch (35) AMA & Al Jazeera Global Update

 

NLNG Prize for Literature 2018

Zenith Zero Balance

CBN banner

Firstmobile banner

 

 

 

NEWS EXPRESS TV

LIBYA vs NIGERIA 2-3 Goals Highlights

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement