Economy
Nigeria’s Insurance Sector Premium Grows 20.1% in Q2 2022
By Adedapo Adesanya
Nigeria’s insurance sector, in the second quarter of this year 2022, recorded N369.28 billion premium, indicating 20.1 per cent growth compared to the performance in the same period the previous year.
This was contained in the latest sector performance statistics released by the National Insurance Commission (NAICOM), which indicated a 65.0 per cent quarter-on-quarter performance.
Describing this as a notable performance, NAICOM said the performance analysis was an insight into the market behaviour of the insurance sector in the period under review.
Giving a premium contribution analysis by each class of business, the commission said out of the N369.2 billion, life insurance contributed N150.0 billion, followed by oil and gas insurance which yielded N71.2 billion, fire insurance yielded N45 .3 billion, while motor insurance yielded N32.4 billion, with marine insurance contributing N26.9 billion premiums and general accident policy yielding N24.0 billion.
According to NAICOM, the performance showed that the insurance sector grew 20.1 per cent higher than the National Real Gross Domestic Product (GDP) of 3.5 per cent during the same period.
NAICOM said the proportional participation of each class of business suggested the continued improvement of the life insurance business as driven by its component of the individual life, noting that the Non-Life segment maintained its primacy at 59.3 per cent of the total premium generated.
“Insights in the segment show Oil & Gas was the leading driver at 32.5 per cent with a distant second at 20.7 per cent for Fire. Motor Insurance stood at 14.8 per cent while Marine & Aviation, General Accident and Miscellaneous reported a share of 12.3 per cent, 10.9 per cent and 8.9 per cent in this order.
“Life business, on the other hand, recorded 40.6 per cent of the insurance market production as its share contribution, gradually closing up. The share of Annuity in the Life Insurance business logged at about 24.7 per cent while Individual Life held a major driver position at 41.8 per cent of the premium generated during the period”, the commission said.
NAICOM said operational confidence remained high in spite of economic challenges in the financial system and the economy at large, as demonstrated by the relevant retention positions in the sector.
According to the commission, Life business retention for the period was 93 per cent while non-life recorded a ratio of 55 per cent as the industry average stood at about 70.5 per cent.
The commission said retention in the non-life, despite reporting an above-average level relative to its prior position of 59.4 per cent in the preceding year, would require focused attention for improvement as it declined by over four points representing eight per cent, year on year.
The commission said the sector during the period witnessed only 0.2 per cent growth in claims compared to the corresponding period of 2021. It said the industry’s statistics for gross claims in Q2 of 2022 stood at N174.8 billion, representing 47.3 per cent of all premiums generated during the period.
“This occasion reflects the professional underwriting capacity of the industry as driven by the intensified regulatory activities of the Commission. On the other hand, the net claims paid stood at about N148.2 billion, signifying 84.8 per cent of all gross claims reported during the period. The Life Insurance business recorded a near perfect point of about 88.90 per cent claims settlement as against the reported claims while the non-life segment stood at about 76.8 per cent”, NAICOM said.
According to the commission, the performance in the Oil & gas in terms of claims settlement recorded some improvement compared to quarter two of the previous year.
The commission was optimistic that sustained market development and growing confidence in the industry would eventually improve the negative peculiarities and challenges of that section of the market.
Profit-wise, NAICOM said the Insurance market remained profitable during the period, recording an overall industry average of about 56.9 per cent, thereby maintaining a relative position of 57.7 per cent recorded in the corresponding period of the preceding year.
By Dipo Olowookere
A 1.08 per cent growth was further printed by the Nigerian Exchange (NGX) Limited on Friday on improved appetite for Nigerian stocks.
Data showed that the insurance sector lost 0.61 per cent yesterday due to profit-taking as the energy space gave up 0.08 per cent, while the commodity counter closed flat.
However, the industrial goods landscape appreciated by 2.06 per cent, the banking index improved by 1.31 per cent, and the consumer goods sector expanded by 0.83 per cent.
At the close of business on Customs Street, the All-Share Index (ASI) increased by 1,563.92 points to 147,040.07 points from 145,476.15 points and the market capitalisation went up by N996 billion to N93.722 trillion from N92.726 trillion.
UAC Nigeria led the advancers’ log yesterday after it grew by 10.00 per cent to N96.80, Transcorp Hotels jumped by 9.71 per cent to N172.80, Royal Exchange appreciated by 8.89 per cent to N1.96, Ikeja Hotel soared by 8.74 per cent to N31.10, and Veritas Kapital leapt by 8.07 per cent to N1.74.
On the flip side, Union Dicon declined by 10.00 per cent to N6.30, ABC Transport slipped by 9.88 per cent to N3.10, AXA Mansard depreciated by 7.19 per cent to N12.90, FTN Cocoa lost 4.62 per cent to trade at N4.75, and Guinea Insurance dropped 3.36 per cent to finish at N1.15.
A total of 38 stocks ended on the gainers’ table and 17 stocks finished on the losers’ table, representing a positive market breadth index and strong investor sentiment.
Traders transacted 361.6 million equities for N14.8 billion in 21,051 deals yesterday versus the 1.9 billion equities worth N19.2 billion traded in 23,369 deals a day earlier, showing a decline in the trading volume, value, and number of deals by 80.97 per cent, 22.92 per cent, and 14.20 per cent, respectively.
The busiest stock for the session was Zenith Bank with 59.5 million units worth N3.6 billion, Access Holdings traded 46.1 million units valued at N973.0 million, Fidelity Bank exchanged 29.4 million units for N560.4 million, FCMB transacted 27.9 million units worth N293.9 million, and Tantalizers sold 13.0 million units valued at N29.8 million.
By Adedapo Adesanya
Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.
The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.
Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.
The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.
Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.
During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.
InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.
By Adedapo Adesanya
The Naira depreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, December 5, as FX demand pressure mounts.
The Nigerian currency lost N2.60 or 0.18 per cent against the greenback to close at N1,450.43/$1 compared with the previous day’s N1,447.83/$1.
Equally, the domestic currency declined against the Pound Sterling in the official forex market during the session by N4.48 to trade at N1,935.45/£1, in contrast to Thursday’s closing price of N1,930.97/£1 and shrank against the Euro by 43 Kobo to end at N1,689.17/€1 versus the preceding session’s rate of N1,688.74/€1.
Similarly, the local currency performed badly against the US Dollar at the GTBank FX counter by N2 to close at N1,455/$1 versus Thursday’s N1,453/$1 but traded flat at the parallel market at N14.65/$1.
As the country gets into the festive period, pressure mounted on the local currency reflecting higher foreign payments and lower FX inflows.
However, there are expectations that the Nigerian currency will be stable, supported by interventions by to the Central Bank of Nigeria (CBN) in the face of steady dollar Demand and inflows from Detty December festivities that will give the Naira a boost after it depreciated mildly last month.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450/$1 next week, buoyed by improved FX interventions by the apex bank.
As for the crypto market, it was down yesterday due to profit-taking associated with year-end trading. However, the December 1-Year Consumer Inflation Expectation by the University of Michigan fell to 4.1 per cent from 4.5 per cent previously and 4.5 per cent expected. The 5-Year Consumer Inflation Expectation fell to 3.2 per cent from 3.4 per cent previously and 3.4 per cent expected.
With the dearth of official economic data of late, these private surveys have taken on a new level of significance and the market banks of them to make decisions.
Cardano (ADA) depreciated by 5.7 per cent to $0.4142, Dogecoin (DOGE) slid by 5.1 per cent to $0.1394, Ethereum (ETH) dropped by 3.9 per cent to $3,039.75, Solana (SOL) declined by 3.8 per cent to $133.24, and Litecoin (LTC) fell by 3.7 per cent to $80.59.
Further, Bitcoin (BTC) went down by 2.6 per cent to sell at $89,683.72, Binance Coin (BNB) slumped by 2.2 per cent to $883.59, and Ripple (XRP) shrank by 2.1 per cent to $2.04, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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