Total assets in the insurance sector expanded by 5.15 per cent to N3.88tn at the end of the third quarter of 2024 compared to N3.69tn reported in the previous quarter.

This was indicated in the bulletin of the insurance market performance in the third quarter published by the Research & Statistics Department of the National Insurance Commission on Monday.

The analytical report released every quarter describes the market performance during the period under review.

In terms of assets for the third quarter, the report revealed that the non-life business accounted for a majority of the assets at N2.34tn, while the life business’ assets stood at N1.54tn.

The report said, “The industry indeed has demonstrated some significant level of robustness, profitability, and stability as established by the performance in premium generation, favourable net loss ratios, substantial market expansion, and a competitive operating environment. More importantly, is the favourable outlook of the market owing to the ongoing regulatory policy direction in terms of sector-wide process automation, market deepening measures, and a sustainable legal framework improvement.”

The industry also saw gross premium written rise by 60.9 per cent, year on year and 44.3 per cent on a quarter-on-quarter basis, to close at about N1.17tn. Again, the non-life sector led the performance as it recorded a market share of 68.9 per cent for a total volume of N808.4bn while the life segment accounted for 31.1 per cent of the market premium aggregate.

Non-life businesses include motor, fire, general accident, marine, oil & gas, and miscellaneous insurance, while life insurance comprises individual and group life insurance and annuity business.

A further breakdown of the data in the non-life business showed that the oil & gas insurance portfolio led with a 35.2 per cent contribution, followed by fire insurance at 21.3 per cent. Motor insurance also accounted for 14.4 per cent, while marine & aviation, general accident, and miscellaneous contributed 12.4 per cent, 9.0 per cent, and 7.5 per cent, respectively.

Analysis of the Life Insurance segment revealed that Individual Life business led with about 41.8 per cent contribution of all the life insurance premiums during the quarter, followed by Annuity business with 31.8 per cent and Group Life insurance cornering the rest.

On the claims side, the industry reported a rise in gross claims reported in Q3 2024, reaching N564.1bn, which is representative of about 48.1 per cent of the total premiums generated during the period.

While highlighting the need for accelerated premium growth and appropriate rate setting, the report read, “The Life Insurance segment recorded an impressive claims settlement ratio of 81.6 per cent, while the Non-Life segment achieved 73.6 per cent.

“The ratio of net claims paid demonstrated strong performance across various business classes. Motor Insurance achieved an outstanding ratio of 92.3 per cent, followed by Miscellaneous at 88.9 per cent. General Accident and Fire businesses recorded 86.3 per cent and 75.1 per cent, respectively. The oil & gas business, while lower at 63.7 per cent, showed significant progress compared to 43.1 per cent recorded in the corresponding period of the previous year.”

The insurance sector demonstrated profitability during the period under review as its overall net loss ratio average was 62.8 per cent. The non-life segment recorded a loss ratio of 66.7 per cent, while the life business reported 57.4 per cent during the period, representing a significant improvement in the profitability position of the life segment, highlighting an enhanced market performance and a positive outlook.

Despite the positive outlook, 11 insurers reported a poor net loss ratio during the period under review. These were underwriters with figures of a hundred per cent and above of net loss ratios. They were not mentioned in the report.

Like the previous quarter, the market concentration as shaped by competition remained the same, indicating that the market control setting has not significantly changed.

In Q3 2024, the uneven share of the business was more pronounced within the Life sector compared to the Non-Life, as statistics showed that the top three Life insurance companies controlled about 59.8 per cent of the total Life premiums, while the top three Non-Life insurers controlled 33.3 per cent of all the premiums generated in that part of the market.

“Additionally, 65.3 per cent of all life insurance business was accounted for by the top ten players in the market during the quarter. On the other hand, the top ten underwriters in the non-life sector generated about 65.3 per cent of the total gross premiums, while the least ten companies in the segment accounted for just 0.7 per cent of the market during the period under review, apparently expressing a relative balance compared to the life insurance section of the market.

“Although the Life segment proved less desirable, it is, however, only on a relative basis, but not too exposed to the market concentration risks vulnerabilities,” the report affirmed.