Oil & Gas Underwriting Capacity Now Records 36% – NAICOM

According to the National Insurance Commission, the oil and gas sector has recorded 36 per cent premium retention in 2022 and ranked as the underwriting sector with the lowest premium retention in the country.

NAICOM disclosed this in its ‘Bulletin of the insurance market performance’, a statistics department quarterly report of the insurance market for fourth quarter, 2022.

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.

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.

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.

It said this in a statement titled ‘We moved from dictatorial regime to democracy in 1999, but which way for the economy?’

The statement said, “As the National Institute of Credit Administration leads the way to the credit economy under the power given to it by the national Act of Parliament No 1012 of 2022, we urge everyone to connect with the process.

NICA noted the journey for the transition of the Nigerian economy from a cash-based to a virile credit system had been unveiled.

It stated that, “When the country resolved to disregard the dictatorial regime in 1999 for a people-based democracy, the economy was overlooked.

All over the world where the dictatorial governance existed, it stated, the cash economy that the regime operated was an identical twin of dictatorship.

It said, this was, “Bearing the same generic characteristics which range from a wide inequality between the wealthy and the poor, to disruption of the middle class, unbearable poverty capitalism, dwindling revenue generation, to death of industries, customised corruption, money laundering, tax evasion since cash-based transactions are not traceable, vulnerability to theft, and unemployment, among others.

“Nigeria can no longer wait to adopt a credit-based system of economy. The journey for this transition has commenced.”