Insurance Companies Posts N400bn Premium in 2018

Nigeria Insurers Association [NIA] President, Mr. Tope Smart announced that the Nigerian insurance sector, in 2018, grew its total premium from N363 billion in 2017, to N400 billion in 2018, with a representation of a 10 per cent growth in the volume of business written by the industry operators.

According to the Smart, during the 48th Annual General Meeting of the umbrella body of insurance underwriters, the Nigeria Insurers Association (NIA). Held in Lagos recently,  he said, during the year under review, the insurance industry contended with a lot of negative factors. He highlighted these to include poor operating environment which the insurance sector like every other sector of the economy waded through in the year under review.

He added, he identified poor power outage, which according to him continued to be a major challenge to businesses in Nigeria,

He further noted that failure to abolish or amend the CITA 2007 remained a huge burden to the insurance companies. Also disclosed that the association was working closely with the National Insurance Commission (NAICOM) to promote the business of insurance and increase its contribution to national Gross Domestic Product (GDP).

Section 16 of the company income tax requires insurers to pay tax on every claims that is up to 25 percent of their gross premium which they saw as double taxation.

Smart further explained other negative factors that affected the insurers and the economy in general during the year, Smart, said “Growing herdsmen/farmers’ clashes across the country, insurgency and armed banditry in the north, rising cases of kidnapping, armed robbery and other violent crimes as well as communal clashes in some states all combined to negatively affect the bottom line of many insurance companies.”

“Some of these initiatives include the insurance industry rebranding project, regulation on micro insurance, collaboration on financial inclusion, bancassurance guidelines and others which will impact positively on the business of insurance companies”.

He stressed that the circular issued by NAICOM on the new capitalisation for insurance and reinsurance companies, was part of the regulator’s initiative towards promoting the insurance industry.

The regulator, had on May 20th, declared a new capital regime for the industry, saying that with effect from June 2020, insurance firms underwriting life business should increase their operating capital from the present level of N2 billion to N8 billion, those into General business are expected to increase theirs from N3 billion to N10 billion, composite firms would raise their capital base from N5 billion to N18 billion, while reinsurance firms would move from N10 billion to N20 billion.

Smart, however, noted that  the association has started engaging NAICOM with a view to defining the components of the new capital level as well as the incentives and palliatives that members will enjoy to ensure that as many companies as possible scale through.

He urged the association members to contact the secretariat if they face challenges and also for updates, “on our part we will continue to update you as we make progress in our engagements with the commission.”

Also speaking, Director-General of Nigerian Insurers Association, Mrs. Yetunde Ilori, informed the members of successful implementation of a USSD code, with the aim to enable policyholders and law enforcement agencies to arrange for meetings where member companies can deliberate on the challenges and proffer solutions so as to ensure sustainable growth of the industry.

Ilori added that ,“The introduction of the code is a major achievement for the association as it eliminates challenges posed by poor internet connectivity in rural areas which had been a major issue in the development of hand-held devices for enforcement of NIID”.