Economy
Agusto & Co Predicts 8% Growth for Insurance Sector in 2017
By Dipo Olowookere
A report for the insurance industry for 2017 has been released by Agusto & Co, a rating firm based in Nigeria.
In the report, Agusto & Co noted that the role of insurance in the Nigerian economy cannot be overstated and that its strategic importance in underwriting business and individual risks is evident in an estimated gross premium income (GPI) of S58;356 billion generated by the insurance industry in 2016, reflecting a 10 percent growth over FY2015.
The agency said it projects a moderated growth rate of 8 percent on account of the recession which is expected to have significant impact on major business lines in 2017.
It also estimates that 28 percent of the Industry’s GPI was paid out as claims in 2016, helping businesses and individuals recover from losses quickly.
The insurance industry is a major contributor to economic growth and development as premiums collected are invested in banks and deployed to fund government projects, the report said.
In 2016, the Nigerian insurance industry invested an estimated S58;178 billion in the banking industry as placements & deposits and held Treasury instruments of over S58;270 billion.
“We expect increased investments in government securities in 2017 as Insurers take advantage on higher interest rates,” the report said.
Opportunities in the Insurance Industry abound as the Industry’s penetration rate stood at 0.4 percent in 2015.
Insurance density rate which measures GPI as a proportion of population is $8.3 compared to Kenya’s $36.4 and South Africa’s $970.8.
It said going forward, evolving risks such as job losses, cyber risks among others will offer prospects for the development of new insurance products.
“We expect increased government spending in the near term which will support GPI growth.
“In addition, micro insurance- which allows people purchase insurance cover in small daily premiums payable using mobile phones- is expected to gain traction in the near term with insurers using various avenues to reach the uncaptured market,” the report said.
“The current inflationary pressures have an upside on the Industry’s investment portfolio performance as interest rates soar to overcome rising inflation and negative returns on investments.
“We expect these positives to offset the negatives in the industry; therefore, we attach a stable outlook to the Insurance Industry. The industry will also benefit from a probable devaluation and continued growth in life business in 2017,” it added.
Like most other Industries operating in Nigeria, the Insurance Industry was adversely impacted by the downturn in the economy which had its roots in declining crude oil prices since 2014.
The Nigerian economy went into a recession in the third quarter of 2016 following two consecutive quarters of negative GDP growth.
This slowed down activities in various industries including the insurance industry.
Inflationary pressures also had a negative effect on cost of operations as well as the value of long term savings. Reduced consumer purchasing power threatened GPI growth and increased surrenders in the life business segment.
In the non-life segment we observe a preference for less expensive insurance covers such as third party insurance cover as against comprehensive motor insurance cover.
The foreign exchange demand management tactic adopted by the Central Bank of Nigeria in controlling outflows from already depleted reserves resulted in a scarcity of FX which in turn impacted dollar denominated premiums negatively.
The naira depreciated significantly against the dollar, trading at S58;305/$ to S58;315/$ in the interbank market and as high as 358;498/$ in the black market.
The resultant effect is a reduction in the insurance cover on assets such as motor vehicles whose prices have almost tripled. We expect these FX challenges to persist in 2017.
The industry’s regulatory environment is likely to change in the near term in response to the current macroeconomic climate.
Regulators are beginning to emphasize risk profiles of insurance companies as against amount of capital held. The proposed Risk Based Supervision Framework which is expected to be implemented in the near term will prompt reviews of business strategies.
“As a result, we foresee mergers and acquisitions in the Industry as well as foreign direct investments in the near term.
“Nonetheless, Agusto & Co is of the opinion that restrictions in the current FX regime may impede foreign direct investments.
Another regulation that will shape operations in the insurance industry is the Bancassurance Guidelines which has received significant attention from regulators in recent times,” the report said.
The competitive landscape remains intense across major business lines such as motor, fire, general accidents, oil& gas and life insurance.
The Agusto and Co Nigerian Insurance report ranks Industry players by various indices across major business lines, providing a snapshot of key performance indicators at a glance.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange further appreciated by 0.23 per cent on Thursday, April 23, with the Unlisted Security Index (NSI) adding 8.99 points to close at 3,969.96 points against the previous day’s 3,968 points.
The rise in the share price of Central Securities Clearing System (CSCS) Plc by N2.86 to N69.34 per unit from N66.48 per unit raised the market capitalisation of the NASD bourse by N5.38 billion to N2.380 trillion from N2.375 trillion.
Yesterday, there were two price losers, led by Food Concepts Plc, which lost 29 Kobo to sell at N2.65 per share versus N2.94 per share, while UBN Property Plc dipped by 22 Kobo to N2.03 per unit from N2.25 per unit.
During the session, the volume of securities traded declined by 97.9 per cent to 451,522 units from 21.5 million units on Wednesday, the value of securities depreciated by 52.32 per cent to N23.6 million from N49.5 million, and the number of deals depreciated by 3.6 per cent to 27 deals from 28 deals.
At the close of business, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by CSCS Plc with 59.5 million units exchanged for N4.0 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.
GNI Plc also closed the day as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
By Adedapo Adesanya
Fresh foreign exchange (forex) demand pressure saw the Naira depreciate against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 22, by N5.46 or 0.4 per cent to trade at N1,353.91/$1 compared with the preceding day’s value of N1,348.45/$1.
It was the same outcome for the local currency in the official market after it depreciated against the Pound Sterling by N4.13 to close at N1,825.88/£1, in contrast to the preceding session’s N1,821.75/£1, and against the Euro, it dropped 72 Kobo to finish at N1,582.72/€1 versus N1,582.00/€1.
But the Nigerian Naira appreciated against the US Dollar at the GTBank FX desk by N2 during the session to quote at N1,361/$1 compared with Wednesday’s closing price of N1,361/$1, and at the parallel market, it closed flat at N1,375/$1.
FX Pressure came as data showed that NFEM interbank turnover was N28.117 million, lower than the N66.084 million recorded the previous day.
Concerns over liquidity pressures, policy transparency, and confidence in Nigeria’s FX market continue to grip the market while the country’s foreign reserve declines further, even as the Central Bank of Nigeria (CBN) recently said that the recent decline in Nigeria’s external reserves should not be a cause for concern.
Global developments also played a significant role, as rising geopolitical tensions boosted demand for the US Dollar, further weakening emerging market currencies, including the Naira.
As for the cryptocurrency market, there was a mixed outcome as traders reacted to rising geopolitical tensions from the Iran war and fresh inflation data from Japan.
Japanese inflation ticked higher in March, stoking expectations that the Bank of Japan may soon signal rate hikes, which could strengthen the yen and unsettle global risk assets.
The Iran conflict has disrupted oil flows through the Strait of Hormuz, raising energy costs and inflation risks worldwide and potentially complicating efforts by the Federal Reserve to cut interest rates.
Ethereum (ETH) declined by 1.8 per cent to $2,316.53, Bitcoin (BTC) lost 0.6 per cent to sell at $77,935.53, Solana (SOL) fell by 0.5 per cent to $85.67, and Binance Coin (BNB) dropped 0.4 per cent to sell for $634.85.
However, Dogecoin (DOGE) appreciated by 1.4 per cent to $0.0976, Ripple (XRP) grew by 0.7 per cent to $1.43, Cardano (ADA) expanded by 0.6 per cent to $0.2493, and TRON (TRX) improved by 0.2 per cent to $0.3279, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Aduragbemi Omiyale
The resilience shown by Nigerian Breweries Plc in the 2025 fiscal year, despite a volatile macroeconomic environment, which consumed several businesses, has not got without notice.
Shareholders of the brewery giant applauded the board and management for the strong recovery and improved profitability recorded in the year.
At the company’s 80th Annual General Meeting (AGM) on Wednesday, April 22, 2026, in Lagos, they attributed these achievements to disciplined cost management and a significant reduction in finance expenses.
“We are proud of how the company has withstood the ups and downs of a challenging environment. The return to profitability and the reversal of the negative cash position recorded in the previous two financial years are commendable,” a member of the Noble Shareholders Association, Mr Owolabi Opeyemi, said at the gathering.
Also, the immediate past Secretary of the Independent Shareholders Association of Nigeria (ISAN), Mr Eke Emmanuel, noted that the company’s resilience reflects strong leadership and a sound strategic direction.
“It is good news that we have been here for 80 years. There is no reason why we will not be here for the next 80 years with what we have achieved. To return to this level of profitability and cash position shows the Board has done an enormous amount of work,” he said.
Addressing investors at the AGM, the board chairman, Mrs Juliet Anammah, expressed confidence that the company is firmly on a recovery path following the net losses recorded in the past two years due to macroeconomic pressures and fiscal reforms.
She thanked shareholders for their continued support and reaffirmed that the company will build on its 2025 performance as it accelerates growth ambitions.
“We have a solid foundation built over eight decades, anchored on a strong portfolio of brands, an extensive nationwide sales and supply chain network, ongoing digital transformation, and most importantly, our people. These strengths remain critical to sustaining our leadership position,” the former chief executive of Jumia Nigeria said.
Ms Anammah also addressed the company’s dividend position, noting that the decision not to declare a dividend reflects the need to rebuild retained earnings impacted by prior macroeconomic shocks, particularly foreign exchange-related losses.
“We recognise the importance of dividend payments to our shareholders and sincerely appreciate your continued understanding. While we are not declaring a dividend at this time due to negative retained earnings, we are working diligently to restore the company’s financial position and return to dividend payments as soon as it is sustainable to do so,” she added.
She further noted that the board remains vigilant to external risks, including the Middle East crisis and broader macroeconomic challenges, which may impact the pace of improvement in the 2026 financial year.
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