Agusto & Co., a Pan-African credit rating agency, has predicted that the Nigerian insurance industry premium will grow by eight percent this year. This prediction is contained in the company’s2017 “Insurance Industry Report.” This projection was based on a probable devaluation of the nation’s currency, anticipated increase in infrastructure during the year as well as continued growth in life business in the sector.
The Augusto also anticipated that profits in the sector would be upheld by increased investment income due to rising interest rates; but moderated by rising claims payments. It pointed out that the industry’s low penetration rate (GPI as percentage of Gross Domestic Product) of 0.4 per cent, presents huge growth opportunities.
According to Mrs Yinka Adelekan, Executive Director, Financial Institutions, the report identified the threats and growth opportunities in the Nigerian insurance industry. “As the largest economy in Africa, the Nigerian insurance industry remains largely underdeveloped. The industry has huge and untapped potentials and the 2017 report highlights some of the opportunities untapped” she said.
Some of the growth opportunities identified in the report that the insurance industry could develop products exploit were risks such as job losses, cyber risk, among others. Similarly, anticipated government spending in construction could support growth in the industry through bonds, group life, and workers’ compensation, among others. The report also said that micro-insurance could provide business because of large number of Nigerians who are not under any form of insurance coverage.
By Dike Onwuamaeze