By Jeph Ajobaju, Chief Copy Editor
Insurance rebounded 15.7 per cent in Gross Domestic Product (GDP) in the first half of the year ended June 30 (H1 2021), based on the financial performance of 17 firms in the industry filed with the Nigerian Exchange Group (NEG).
Gross Premium Written (GPW) rose 23.2 per cent to N217.3 billion H1 2021 from N176.4 billion in H1 2020 but profit after tax (PAT) declined 5.1 per cent year-on year (YoY) to N16.8 billion from N17.7 billion.
National Bureau of Statistics (NBS) data reported by Vanguard shows that insurance emerged from a sector GDP drop of -4.58 per cent in the first quarter of 2021 (Q1 2021) to 15.68 per cent growth in Q2 2021.
Insurance GDP contracted -29.53 per cent in Q2 2020 in the heat of pandemic lockdowns and other macroeconomic headwinds.
The NBS explained that “insurance under Financial and Insurance Sector grew by 15.68 per cent in Q2 2021 from -4.58 per cent in Q12021 and 29.53 per cent in Q2 2020.
“The Finance and Insurance Sector consists of the two subsectors, Financial Institutions and Insurance, which accounted for 87.92 per cent and 12.08 per cent of the sector respectively in real terms in Q2 2021.
“As a whole the financial and insurance services sector grew at -1.86 per cent in nominal terms (year on year), with financial institutions growing at -3.93 per cent while insurance recorded a growth rate of 16.41 per cent.
“The overall rate was lower than that in Q2 2020 by -22.68 per cent points and by -4.01 per cent points than the preceding quarter.
“Quarter-on-quarter growth was -3.45 per cent. The sector’s contribution to the aggregate nominal GDP was 3.21 per cent in Q2 2021, lower than the 3.76 per cent it represented a year earlier, and the contribution of 3.25 per cent it made in the preceding quarter.
“Growth in this sector in real terms totaled -2.48 per cent, lower by -20.97 per cent points from the rate recorded in the second quarter of 2020 and -2.02 per cent points from the rate recorded in the preceding quarter.
“For the first half of 2021, growth in financial and insurance services stood at -1.47 per cent year on year, compared to 19.63 per cent year on year for 2020.”
Fair performance, says FBN Insurance boss
FBN Insurance Brokers Managing Director Olumide Ibidapo described it as a fair performance considering the challenging economic environment.
“If you look at Q1 of the 2021, the industry witnessed a contraction of more than 4 per cent. In Q2 2021, we are now having a growth of more than 15 per cent which to me is a good performance even though 2020 was a lockdown year.
“Any major performance in 2021 will reflect this positive growth. So looking at the industry as a whole, it has been a fair performance considering the challenging economic environment that we are operating in,” he told Vanguard.
“It has been a tough journey most especially looking at the event of 2020 and the outcome of the EndSARS crisis and lockdown of the economy.
“Insurance-wise, the majority of the claims lodged following the EndSARS event are being settled to a greater extent and billions of naira have been settled in claims by the insurance industry.
“The outlook is looking good. The second half of the year will be positive.”
EndSARS protest costs insurers N5.4b in claims
Insurers have paid N5.4 billion claims to those whose businesses or properties were destroyed during the peaceful #EndSARS protest by youths last October which was hijacked by hoodlums to vent violence across the country.
Nigeria Insurers Association (NIA) Director General Yetunde Ilori disclosed the amount in Lagos last month, saying the insurance industry is doing more than the public knows.
She said the reason it seems insurance is not paying is because nobody would come out to say, ‘“I have been paid an amount of money’ for security reasons.”
The principles of insurance, Ilori explained, are that so many people contribute to solve the problems of unhappy people, per reporting by The Nation.
There is a privacy policy on insurance which limits how much information an insurance company can give on claims paid, she stressed.
“We have to respect the privacy policy of policyholders. There are limits to how we can publicise what has happened to them,” Ilori said.
“Nobody wants to say when his house got burnt, he was paid millions of naira. So, the insurance industry is doing much more than we all know.
“Everything revolves around the situation in the country where you cannot divulge too much information. But as an umbrella body, we will summarise what we are paying.”
