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 Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
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 Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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