Leading Nigerian Insurance Firms Pay N129.93 Billion Worth Of Claims In 2022

Article Abstract

• Main insurance coverage firms in Nigeria paid N129.93 billion in web claims in 2022, in comparison with N109.63 billion in 2021.
• The insurance coverage firms earned N335.04 billion in gross premium earnings in 2022, up from N267.66 billion in 2021.
• The excessive claims have impacted the premium development fee and profitability of insurance coverage companies, with financial challenges, inflation, and fraudulent claims being contributing components.

Main insurance coverage firms in Nigeria paid a complete of N129.93 billion in web claims within the full yr of 2022 as towards N109.63 billion recorded throughout the comparable interval in 2021.

That is in line with knowledge compiled by Nairametrics from the monetary experiences of Custodian Insurance coverage, NEM Insurance coverage, Coronation, Mansard Plc, AIICO, Mutual Advantages Assurance, and Cornerstone Insurance coverage, all of that are among the many largest insurance coverage firms quoted on the Nigerian Change.

The insurance coverage firms additionally earned a complete of N335.04 billion in gross premium earnings throughout the interval underneath assessment, in comparison with N267.66 billion in 2021.

What this implies is that the insurance coverage firms paid 39% of their premium earnings as claims bills in comparison with 41% in the identical interval final yr, a marginal lower of two%.

What it is best to know

In line with specialists, the excessive claims recorded by insurance coverage companies in recent times have affected their premium development fee in addition to profitability.

Financial challenges corresponding to entry to foreign exchange grew to become very tough because the yr progressed, and the hole between the interbank and parallel market rose sharply, compounded by the safety challenges within the nation.

Additionally, financial headwinds occasioned by the ripple results of Russia’s invasion of Ukraine performed an enormous function.

Inflationary stress adversely affected many Nigerian family wallets throughout the yr underneath assessment.

This inflationary atmosphere heightened the challenges already being confronted by insurance coverage firms in Nigeria. Additionally, shrinking federal/state authorities revenues, devaluation of the Naira, and excessive power prices elevated challenges being confronted by insurance coverage firms in Nigeria.

Nigerian insurance coverage firms and their claims 

Highlighted beneath are the seven Nigerian insurance coverage companies by claims, primarily based on revealed monetary statements.

7. Coronation Insurance coverage – N2.927 billion

Coronation Insurance coverage Plc trailed with a declare cost of N2.927 billion from N5.113 billion reported in 2021. Its gross premium earnings stood at N18.688 billion in 2022, a 32.16% enhance over the N14.440 billion reported in 2021. Notably, 15.66% of its whole gross premium earnings was incurred on claims within the assessment yr.

Nevertheless, it reported a revenue after tax of N1.345 billion in 2022 from a lack of N2.583 billion recorded in 2021.

6. Cornerstone Insurance coverage Plc – N3.368 billion

Cornerstone Insurance coverage incurred a complete of N3.368 billion in claims in 2022, which is 29.78% larger than the N2.595 billion spent within the corresponding interval of 2021. In the meantime, gross premium written rose by 21.27% to N21.678 billion from N17.793 billion in 2021.

It needs to be famous that 15.54% of the entire gross premium earnings was incurred as claims within the interval underneath assessment.

Cornerstone Insurance coverage’s Revenue after tax, nevertheless, got here underneath stress from development in claims because the agency reported a 28% drop in web earnings to N2.547 billion from N3.536 billion recorded in 2021.

5. NEM Insurance coverage Plc – N7.647 billion

NEM Insurance coverage adopted with a web declare cost of N7.647 billion in 2022 from N5.561 billion recorded in 2021, a rise of 37.51%. Equally, the gross premium earnings for the interval was N31.434 billion as towards N26.545 billion within the corresponding interval of 2021, a year-on-year enhance of 19.14%.

This means that the corporate paid 24.33% of its gross premium earnings as claims within the yr.

NEM Insurance coverage reported a revenue after tax of N5.440 billion, a 22.74% enhance from N4.432 billion posted in 2021.

4. Mutual Advantages Assurance Plc – N15.183 billion

Mutual Advantages Assurance Plc recorded web claims of N15.163 billion in 2022, a 26.88% enhance in comparison with N11.951 billion incurred within the corresponding interval of 2021. The insurance coverage agency recorded a gross premium earnings of N33.613 billion from N26.129 billion, accounting for a development of 32.47%.

The corporate reported a revenue after tax of N4.064 billion in 2022 from a lack of N5.425 billion declared in 2021.

3. Custodian and Allied Funding Plc – N22.655 billion

Custodian and Allied Funding Plc noticed its claims rise to N22.655 billion in 2022 from N20.179 billion in the identical interval of 2021, a development of 12.27%. Its gross premium rose by 11.94% to N74.137 billion from N66.228 billion recorded in 2021.

In the meantime, 30.56% of its gross premium earnings was used as claims throughout the assessment interval.

The corporate recorded a 9.74% enhance in revenue after tax to N11.162 billion in 2022 as towards N10.171 billion posted in 2021.

2. AXA Mansard Plc – N33.180 billion

AXA Mansard paid a whopping declare of N33.180 billion throughout the quarter as towards N24.317 billion in 2021 a rise of 36.45%, Its gross premium earnings stood at N69.445 billion within the assessment interval from N55.723 billion within the comparable interval 2021, a rise of 24.63%.

Notably, 47.78% of the gross premium earnings was spent as web claims within the assessment interval.

The insurance coverage agency reported a 34.81% decline in web earnings to N2.435 billion for 2022 from N3.735 billion recorded in 2021.

1. AIICO Insurance coverage Plc – N44.987 billion

AIICO Insurance coverage incurred a web sum of N44.987 billion on claims in 2022, a 12.71% enhance in comparison with N39.914 billion spent within the earlier yr (2021).

The gross premium earnings for the interval grew by 40.82% to N86.043 billion in 2022 from N61.103 billion in 2021, indicating that 52.28% of its gross earnings was utilized in paying claims within the assessment interval.

AIICO Insurance coverage Plc recorded a revenue for the yr of N7.552 billion in 2022 as towards its earlier earnings of N4.916 billion recorded in 2021.

Operators’ reactions  

The Managing Director of Tangerine Normal Insurance coverage Plc, Mr Mayowa Adeduro, reacted to the event in an unique chat with Nairametrics. He stated that the sustainable excessive claims had been because of the incidences of the financial downturn which made individuals ask for claims even for minor issues.

• “We seen that folks’s upkeep tradition has gone down because of the excessive price of residing spiked by inflation. The impression of inflation has made the variety of claims go larger. Inflation is an element as a result of the imported objects have gone up attributable to a hike within the alternate fee and this affected the upkeep tradition in Nigeria.
• “Disposable earnings has gone down, and persons are struggling to keep up what they’ve. For example, if automobiles aren’t maintained very properly and an accident happens, the insurance coverage agency will nonetheless pay the claims.
• “Social vices corresponding to armed theft, kidnapping, setting homes ablaze, amongst others are on the rise. All of those are having a unfavourable financial impression on the economic system. As a consequence of financial hardships, fraudulence insurance coverage claims are additionally on the rise. There are incidences the place some individuals set their homes ablaze and are available for insurance coverage claims.  
• “Low upkeep tradition, job infidelity, theft of products on transit, and breakdown of automobiles on the roads attributable to dangerous roads, all mixed to assist spike the rise in claims,” Adeduro stated.

Talking at its twelfth Annual Normal Assembly held in Lagos, Adetola Adegbayi, Chairman of the Nigeria Legal responsibility Insurance coverage Pool, stated that the hyperinflation has considerably elevated residing prices and insurance coverage claims in Nigeria attributable to excessive dependence on importation.

She famous that the incidence of fraudulent claims can also be on the rise because of the impression of inflationary traits and unemployment.

• “To abate this, the trade is suggested to be proactive and extra dynamic in its claims administration, particularly with the elevated cowl granted underneath the motor coverage attributable to not too long ago launched fee assessment pointers.
• “The necessity for the trade to be extra dynamic and pro-active in its claims administration and administration is subsequently of the essence,” Adegbayi acknowledged.

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