Amid the hardship of recession in 2016, insurers helped restore businesses and protect families of insured Nigerians through payment of claims for losses worth N119.5 billion, a report by the Nigeria Insurers Association (NIA) has shown.
The amount was paid by 58 insurance companies that are members of the association. They comprise 15 specialist life insurance companies, 29 non-life insurance companies, 15 composite insurance companies and two reinsurance companies.
A breakdown of the report shows that the 29 insurance companies offering non-life business paid N57.7 billion claims in the year under review, while the Life business paid N61.87 billion.
It also showed that the claims paid by the Non-Life companies increased from N54.65 billion in 2015 to N57.7 billion in 2016, representing an increase of 5.69 per cent while the claims for Life companies increased from 50.5 per cent in 2015 to N61.8 billion in 2016, representing an increase of 15.84 per cent.
Meanwhile, the non-life and life companies recorded about N315.97 billion insurance premium income in 2016.
NIA Chairman Eddie Efekoha stated in the report that the economy was confirmed to have slipped into recession for the first time in over two decades.
According to him, this reflected economic shocks, inconsistent economic policies, and worsening security problems across the country particularly the Northeast and renewed attacks on oil installations in the Niger Delta regions.
The year, he said, was very challenging for the sector, which battled with low patronage, fragmented payment from major schemes including government as the slide in crude oil price resulted in downturn in earnings.
He said: “The other factors contended with include high inflation rate culminating in increased expenses, unfavorable foreign exchange spell leading to high reinsurance premium paid and claims settled on relevant portfolios. On the global scene, weak global growth lingered, posing a serious challenge to the implementation of the agenda for sustainable development.
“World gross product was projected to have expanded by just 2.4 per cent in 2016, the weak rate as in 2015. This reflects significant downward revisions of growth for many countries in Africa, the Commonwealth of Independent States (CIS), and Latin America and the Caribbean from the forecasts in December 7:15. Persistent weakness in aggregate demand in developed economies remains a drag on global growth, while C’A commodity prices, mounting fiscal and current-account imbalances and policy tightening have further been dampened the growth prospects of many commodity-exporting economies. The already bleak growth prospects have been compounded by severe weather-related shocks, political challenges and large capital outflows in many developing regions.
“The finance and insurance sector consists of the two subscribers, financial institutions and insurance firms, which in nominal terms account for 87 per cent and 13 per cent of the sector respectively. As a whole the sector grew by 19. 74 per cent in nominal terms (year on year) with the growth rates of 20.02 per cent and 17.89 per cent for financial institutions and insurance respectively. The overall rate was higher than that in fourth quarter of 2015 bu 3.03 per cent points, and lower by 0.91 per cent ponts than the preceeding quarter.
“The sector’s contribution to the overall nominal GDP was 3.33 per cent in the fourth quarter of 2016, higher than the 3.14 per cent it represented a year previous, and down from the contribution of 3.51 per cent it made in the preceding quarter. For full year 2016, the sector in real terms contracted by -4.56 per cent, compared to a growth of 7.12 per cent in 2015, driven by a contraction in financial institutions real GDP he adLagos pays deceased workers families N85m death benefitsded.