Nigeria’s Insurance Payouts Soar To N1.9 Trillion: Eight Years of Compensation For Insured Losses

Over the past eight years, Nigerian insurance policyholders have received an impressive total of N1.9 trillion as compensation for insured risks from underwriting firms across the country. 


This substantial sum encompasses indemnity for damaged assets and life insurance to cover the loss of lives between the financial years of 2014 and 2022.


Analyzing the data breakdown reveals that the insurance sector disbursed N33 billion for life claims and N65.5 billion for non-life claims, contributing to a combined total of N99 billion in claims paid during 2014.


The subsequent years also witnessed substantial compensation: In 2015, policyholders were reimbursed N111.1 million, comprising N45.1 billion for life claims and N66 billion for non-life claims.


 The trend continued in 2016, with N67.2 million and N78.6 billion disbursed for life and non-life claims, respectively, accumulating to a total of N145.8 billion.


By the end of the 2017 financial year, the cumulative claims payouts amounted to N186.5 billion, encompassing N72.5 million for life claims and N114 billion for non-life compensation.


 This trend persisted with N252.1 billion, N225.1 billion, and N247.3 billion being paid out in 2018, 2019, and 2020, respectively.


The apex was reached in 2021 when insurance firms compensated insured Nigerians with a remarkable N323.8 billion, marking the highest payout in history.


 The momentum continued into the following year, as policyholders received N318.2 billion for insured risks during the 2022 financial year.


An investigation into the beneficiaries of these claims reveals a diverse range, including public and private companies, federal, state, and local governments, as well as individuals who prudently paid premiums to insure their assets against unforeseen events. 


These beneficiaries, having insured properties, vehicles, lives, and other assets, were appropriately compensated when the insured risks became reality.


The increase in annual claims payments throughout these years is attributed to heightened awareness among the insured population, prompting them to promptly file claims when risks materialize. 


Additionally, the consistent surge in asset replacement value has chipped away at a substantial portion of insurance premium income.


Speaking at the 2023 Retreat for Insurance Journalists themed ‘Improving Stakeholders Perception 2023 and Beyond’ in Uyo, Akwa-Ibom State, Dr. Usman Jankara, Assistant Director of Corporate Strategy and Special Duties at the National Insurance Commission (NAICOM), acknowledged the insurance subsector’s progress in claims payment. 


While noting that there is still room for improvement, he underscored the sector’s consistent annual growth from 2014, except for a minor dip in 2022.


Dr. Jankara reported promising growth trajectories for both life and non-life premiums and highlighted that insurance penetration currently stands at 0.4% of Nigeria’s Gross Domestic Product (GDP), with an aim to increase insurance density to 1.5%.


He also spotlighted the industry’s financial performance, noting a modest 15% annual growth from N282.9 billion in 2015 to N726.2 billion in 2022 in gross premiums. Moreover, the industry’s total assets ballooned from N917 billion to over 2.3 trillion within the same time frame.


Earlier, Mr. Sunday Thomas, the Commissioner for Insurance/CEO of NAICOM, assured policyholders that genuine insurance claims would be honored. 


He urged aggrieved claimants to approach NAICOM for assistance in cases where insurers fail to fulfill their obligation. Mr. Thomas emphasized the regulatory body’s commitment to ensuring insurers uphold their duty of paying valid claims promptly.


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