The overall premium earned by the Nigeria Liability Insurance Pool in 2023 increased by 51.6% to N1.79 billion from N1.18 billion in the previous year.
According to the Pool’s annual report, the increase was prompted by an increase in third-party vehicle insurance premiums that went into effect in January 2023.
In this directive, private vehicles that were paying N5,000 premium for N1m Third Party Property Damage Limit were required to pay N15,000 premium for N3m claims, while owner good vehicles were to pay N20m premium for N5m claims and staff buses were to pay N20,000 premium for N3m claims, according to The Punch
Commenting at the 14th Annual General Meeting of the Pool, which was held recently in Lagos, the NLIP Chairman, Gboyega Lesi, said the growth in the gross premium of the pool “can directly be attributed to the review of third-party premium by NAICOM which took effect from January 1, 2023.”
He added, “Claims expenses grew by 61 per cent from N297.3m in 2022 to N478.6m in 2023. This increase is majorly due to the review of third-party liability limits from N1m to N3m for private motor, N5m for third-party property damage, and the high inflationary rate in the country.
“Similarly, the hike in property pricing driven by the adoption of the fire tariff with a four-year moratorium for full implementation also contributed significantly to the growth in premium income. Despite the increase in claims expenses, the Pool posted an impressive underwriting surplus of N533.4m in 2023, showcasing operational efficiency and prudent risk management.”
At the end of the year, the Pool’s total assets climbed by 39% from N1.3 billion in 2022 to N1.8 billion in 2023.
Lesi stated that the Nigerian insurance business is expected to increase in 2024, albeit from a low base.
He stated, “The country’s insurance industry is relatively underdeveloped, hindered by a range of economic problems in recent years and stratified income levels. However, growing disposable incomes, together with rising confidence among businesses and consumers, will facilitate ongoing growth. The development of the sector as a whole will be reliant upon the expansion of the country’s middle class, which will, in turn, depend on continued economic growth and a stabilisation of the inflationary environment within Nigeria.”
He noted that the leadership changes witnessed across the industry by the end of 2023 as a result of the Code of Corporate Governance’s implementation are expected to have a favorable influence on the industry.
“These changes, aimed at enhancing transparency, accountability, and effectiveness within the sector, have ushered in a new era of leadership characterized by fresh perspectives and innovative approaches. Key players across various insurance firms have undergone restructuring at the executive level, with new leaders appointed to spearhead strategic initiatives and drive organizational growth. The infusion of new talent and expertise is expected to invigorate the industry, fostering a culture of innovation and adaptability in response to evolving market dynamics,” Lesi explained.
The NLIP offers reinsurance services for its members’ third-party obligations, which include motor and general third-party liabilities, workmen’s compensation and employer’s contingent liabilities, and builders and occupiers liabilities, among others.
