October 6, 2023/FBNQuest Report

According to data recently published by the National Insurance Commission (NAICOM), the gross premium of the insurance sector increased to NGN551.4bn in Q2 ’23 from NGN369.2bn in Q2 ’22. This represents an increase of 49% q/q (77% y/y) respectively. The total premium income comprised of income generated from both the life and non-life insurance businesses. Nigeria’s insurance sector has continued to deliver double-digit growth in the face of numerous macroeconomic challenges, including high inflation, rising energy prices and fx shortages.

The robust y/y growth in premium income was underpinned by an 81% y/y expansion in the non-life business to NGN362.4bn in Q2 ’23.

Although all segments of the non-life business increased significantly, fire insurance was the largest contributor.  

The life insurance business which accounted for about 34% of the sector’s premium income was also up by 77% y/y to NGN189.0bn in Q2 ’23.

On a cumulative basis, the total premium income generated by the sector increased by 45% y/y to NGN862.9bn in H1 ’23.

According to the latest national account, the insurance sector grew by 7.3%y/y. This compares to growth rates of -8.0% y/y and 6.9% y/y in Q1 ’23 and Q2 ’22 respectively.

With respect to market size, the sector’s total assets increased by 18% y/y to NGN2.7trn as at Q2 ’23.

The modest y/y rise in the industry’s total assets was due to a 33% y/y increase in the asset size of the non-life insurance business to NGN1.6trn. The total asset of the life insurance business was flat y/y at NGN1.1trn.  

While the insurance sector has made considerable progress in recent years, it still has a long way to go in addressing the low level of insurance penetration in the country.