AXA Mansard Insurance Plc and 10 other insurance companies have reported N92.32 billion profit before tax (PBT) in half year (H1) ended June 30, 2024, about 159 per cent increase from N35.66 billion generated by these companies in the corresponding period of 2023.
The increased PBT of these insurance companies is driven by the surge in the gross premium written, among other key financial performances in the period under review.
Axa Mansard Insurance Plc, followed by AIICO Insurance Plc led others in value of PBT generated in H1 2024.
In its unaudited H1 2024 results, Axa Mansard Insurance declared N28.57 billion PBT in H1 2024, about a 93 percent increase from N14.76 billion reported in H1 2023, while AIICO Insurance declared N14.39 billion PBT in H1 2024, representing an increase of 98 per cent from N7.25 billion reported in H1 2023.
NEM Insurance joined the top three insurance companies, declaring N12.22 billion PBT in H1 2024, a growth of 210.8 per cent from N3.9 billion declared in H1 2023.
The Chief executive officer of Highcap Securities Limited, David Adnori expressed that these insurance companies should take pride in their achievements and resilience amidst the rapidly changing macro environment in the period.
“Last year, Nigeria recorded a prevailing economic landscape, market and inflationary trends that influenced customer spending to shift in consumer demand.
“Despite challenges posed by the macroeconomic environment and supply constraints, these listed insurance companies delivered strong performance, maintaining a disciplined approach to strategic investments for the future hence upholding the strength of our balance sheet,” he said.
He added that insurance has remained a hard sell in Nigeria despite significant changes and advancements.
“However, embedded insurance holds the potential to address these challenges by integrating insurance products with existing services and increasing awareness, accessibility, and trust in the insurance sector,” Adnori said.
The Chief operating officer of InvestData Consulting Limited, Ambrose Omordion noted that the insurance sector performance on the NGX is purely market dynamics, stressing that, though penetration may be weak, a little off these companies are introducing products and services to drive top-line.
The number of insurance companies licensed to operate in Nigeria hit 67 from 54, according to the latest figures obtained from the National Insurance Commission (NAICOM).
The financial institutions and insurance sectors’ contribution to the country’s Gross Domestic Product (GDP) increased by 27 percent in 2023, according to the latest information from the National Bureau of Statistics (NBS). The bureau, in its “Nigerian Gross Domestic Product Report” revealed that both the financial institution and insurance sectors contributed N3.81 trillion in 2023 from N3.01 trillion reported in 2022.
The breakdown revealed that financial institutions in 2023 show an increase of 29 percent to N3.5triilliion from N2.72triillion, while the insurance sector recorded 4.8 percent growth to N305.02billiion in 2023 from N290.98billion in 2022.
The NBS report stated that the Finance and Insurance sector consists of two subsectors, Financial Institutions, and Insurance, in which the former accounted for 94.02 per cent and the latter 5.98 percent respectively in real terms in Q4 2023.
According to the report, “As a whole, the sector grew at 32.29 per cent in nominal terms (year-on-year), with the growth rate of Financial Institutions at 33.98 per cent and 10.37 per cent growth rate recorded for Insurance.
It noted the overall rate was higher than Q4 2022 by 9.71 percentage points, and higher by 2.09 percentage points than the preceding quarter.
“The quarter-on-quarter growth was 28.62 per cent. On an annual basis, the sector grew by 28.24 per cent, higher than 26.42 per cent in 2022. The sector’s contribution to the nominal GDP was 3.76% in Q4 2023, higher than the 3.30 per cent it represented a year previous, and higher than the contribution of 3.17 per cent it made in the preceding quarter.
Growth in this sector in real terms totalled 29.78 per cent, higher by 18.16 percentage points from the rate recorded in the 2022 fourth quarter and higher by 1.56 percentage points from the rate recorded in the preceding quarter.
“Quarter-on-quarter growth in real terms stood at 27.30 percent. On an annual basis, the sector grew by 26.53 percent, higher than 16.36 percent in 2022.
“The contribution of Finance and Insurance to real GDP totalled 4.95 percent, higher than the contribution of 3.95 percent recorded in the fourth quarter of 2022 by 1.00 percentage points, and higher than 4.36 percent recorded in Q3 2023 by 0.60percentage points.”
The financial institutions’ contribution to GDP is on the backdrop of lending to the real sector and expansion in business operating across the continent.
