By Nnamdi Duru
An American market research organisation, Fast Market Research, has predicted that the Nigerian insurance industry would grow at an average rate of 7.5 per cent per annum between 2014 and 2018.
This is part of the conclusions of the new insurance research report from Timetric entitled, "The Insurance Industry in Nigeria: Key Trends and Opportunities to 2018", released recently by the research organisation.
According to the report, the cumulative average grow rate (CAGR) for the country's insurance industry peaked at 10 per cent as a result of the superlative performance of its life insurance segment.
This life arm of the industry was said to have recorded a 22.20 per cent increase in its premium income for last year.
"In terms of written premium value, the Nigerian insurance industry grew at a review period CAGR of 10 per cent. This was due to the strong performance of the life segment, which registered a CAGR of 22.20 per cent during the review period.
"The industry is projected to grow at a CAGR of 7.50 per cent over the forecast period. The strength in the country's economy, combined with the introduction of new laws by the Nigerian insurance regulator, is expected to contribute to the overall growth of the Nigerian insurance industry over the forecast period," the market research organisation predicted.
The American based research organisation also said the growth in Nigeria's insurance industry, during the review period was as a result of the increase in individuals' disposable income, a decrease in inflation rate and a gradual increase in its labour force.
The Nigerian insurance regulator was said to have introduced the International Financial Reporting Standards (IFRS) this year, which was geared more towards harmonising the entire insurance industry.
It also noted that the Nigerian government introduced the 100 per cent FDI in the insurance sector and a wide range of compulsory insurance classes. Nigerian insurance regulator, National Insurance Commission (NAICOM), said only 1 per cent of the total adult population was insured; an indication of a greater scope for new insurers intending to operate and establish the insurance business.
The organisation observed that many Nigerian motorists were unlicensed and uninsured, in spite of the motor insurance being compulsory in Nigeria, while poverty was a major obstacle for the growth of the economy and the insurance industry.
The report provided historical values for the Nigerian insurance industry for the period ranging from 2009 to 2013 and forecast figures for the 2013 to 2018 forecast period.
It also offered a detailed analysis of the key segments and categories in the Nigerian insurance industry, along with forecasts until 2018 and covers a list of parameters, including written premium, incurred loss, loss ratio, commissions and expenses, combined ratio, total assets, total investment income and retentions.
In addition, it profiled the top insurance companies in the country including Custodian and Allied Insurance Plc, Aiico Insurance Plc and Niger Insurance Plc as well as outlined the key regulations affecting them.
The research also sought to make strategic business decisions using in-depth historic and make forecasts on the insurance industry and each segment within it and to understand the demand-side dynamics, key trends and growth opportunities within the Nigerian insurance industry.
It also assessed the competitive dynamics in the Nigerian insurance industry, identified the growth opportunities and market dynamics in key segments and gained insights into key regulations governing the industry and its impact on companies and the industry's future.
The Boston based Fast Market Research is a leading distributor of market research and business information. It represents the world's top research publishers and analysts and provides quick and easy access to the best competitive intelligence.
Source: Thisday
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