The oil and gas sector recorded 36 per cent premium retention in 2022 and ranked as the underwriting sector with the lowest premium retention in the country, according to the National Insurance Commission.
NAICOM disclosed this in its ‘Bulletin of the insurance market performance’, a statistics department quarterly report of the insurance market for fourth quarter, 2022.
According to the report, the average premium that the entire insurance companies were able to retain locally stood at 71.3 per cent in the period under review.
The report stated that, “In the non-life segment which also took a similar pattern, motor insurance continued its lead as the highest retaining portfolio with a retention ratio of about 93.5 per cent, also a point higher than its standing in the prior quarter.
“Oil & gas recorded the least at about 35.9 per cent. The oil and gas portfolio lamentably remained a challenging angle in the market owing to its nature of enormous capital and professional requirements.
“Consequently, the retention performance in the current period sustained its prior position when compared to the third quarter as evidenced by the overall non-life business ratio of 55 per cent, slipping from about 56.6 per cent held in the prior period.”
In the phase of operational challenges posed in domestic and global economies, the report said, the industry continued to post inspiring numbers in business retention, reflective of the market resilience and increasing capacity.
In the period under review, industry wide average retention ratio stood at about 71.3 per cent, although, slightly a point lower than it held in the previous quarter and four points lower in comparison to same period.
Persistently, it added, the life business retained about the same point of 93.3 per cent from its prior position of 93.8 per cent in quarter three.
NAICOM disclosed in the report that the insurance claims reported during the fourth quarter stood at N318.2bn, representing a 31.2 per cent quarter on quarter growth.
It stated that this possible attainment was as a result of growing awareness and market expansion as well as consumer’s confidence.
In a similar pattern, the net claims paid was N244.3bn, growing at about 17.9 per cent QoQ during the same period.
Insights into the non-life segment showed that motor insurance led with regards to claims settlement vis a vis gross claims reported at about 92.3 per cent, signifying nine points improvement as against its prior position.
Fire insurance was the least at about 46.3 per cent, the only class below average proportion.
All other portfolios of general accident insurance (80.7 per cent), oil & gas (51.6 per cent), marine & aviation (74.4 per cent), miscellaneous insurances (86.1 per cent) recorded a proportion above the average, of paid claims against gross claims reported.
Life insurance business on the other hand reported two points less in comparison to the position held in the prior period of 94.6 per cent of net claims paid compared to total claims reported during the same period of 2021.