Connect with us

Business

Leading Nigerian insurance firms pay N116.636 billion worth of claims in 9 months 

Published

on

Insurance

Leading insurance companies in Nigeria reported a total of N116.636 billion in net claims paid during the first nine months of 2023, marking a significant increase from the N96.902 billion recorded in the same period in 2022, representing a notable growth of 20.36%.

These escalating claims have cast a shadow on the premium growth rate and overall profitability of insurance firms in the country. Several factors, including economic challenges, inflation, and an upsurge in fraudulent claims, have contributed to this predicament.

This insightful data has been meticulously compiled by ThePressNG, drawing from the financial reports of prominent insurance companies listed on the Nigerian Exchange, such as AIICO Insurance Plc, Custodian and Allied Investment Plc, NEM Insurance Plc, AXA-Mansard Plc, Mutual Benefits Assurance Plc, Cornerstone Insurance Plc, and Consolidated Hallmark Insurance Plc.

In addition to the increased claims, these insurance companies reported a total of N339.848 billion in gross premiums during the review period, showing substantial growth compared to the N274.628 billion recorded in 2022.

One key takeaway from this data is that insurance companies allocated 34.32% of their premium revenue towards claims expenses, as opposed to 35.28% in the corresponding period of the previous year.

This slight reduction of 0.96% in claims expenditure suggests a potential stabilization in the industry.

Now, let’s delve deeper into the implications of these findings:

Experts in the insurance sector point out that the rising claims recorded by insurance firms in recent years have had a profound impact on their premium growth rate and overall profitability.

Several economic challenges, including difficulties in accessing foreign exchange (forex) as the year progressed, have compounded the situation.

Additionally, security challenges within the country and the ripple effects of Russia’s invasion of Ukraine have further exacerbated the challenges faced by insurance companies.

Inflationary pressures have adversely affected the financial well-being of many Nigerian households during the review period.

This inflationary environment has intensified the pre-existing challenges faced by insurance companies.

Moreover, the shrinking revenues of both federal and state governments, the devaluation of the Naira, and the soaring energy costs have added to the hurdles faced by insurance companies in Nigeria.

Highlighted below are the seven Nigerian insurance firms by claims, based on published financial statements.

The Managing Director of Tangerine General Insurance Plc, Mr Mayowa Adeduro, reacted to the development in an exclusive chat with ThePressNG.

He said that the sustainable high claims were due to the incidences of the economic downturn which made people ask for claims even for minor things.

Speaking at its 12th Annual General Meeting held in Lagos, Adetola Adegbayi, Chairman of the Nigeria Liability Insurance Pool, said that hyperinflation has significantly increased living costs and insurance claims in Nigeria due to high dependence on importation.

She noted that the incidence of fraudulent claims is also on the increase due to the impact of inflationary trends and unemployment.

Trending