The total assets of the insurance companies operating in the country have suffered a decline of N17.72bn, according to the latest figures made available to our correspondent by the Nigerian Insurers Association on Wednesday.
The loss was recorded in 2011, when the total assets of the firms dropped to N573.4bn from N591.12bn the previous year.
The current official statistics for the insurance industry is for 2011 because most of the companies have not had their 2012 financial accounts approved by the regulators.
According to the statistics, the total assets of the non-life insurance companies stood at N370.36bn at the end of 2011 in comparison to N388.77bn in 2010, while those of the life underwriters rose marginally to N203.10bn in 2011 from N202.35bn in the previous year.
The Director-General, Nigerian Insurers Association, Mr. Sunday Thomas, attributed the decrease in the value of the assets to huge write-off of debts by the insurance companies.
“When they are writing off debts, these are part of the assets of the companies and the amounts are quite substantial,” he said.
The Commissioner for Insurance, Mr. Fola Daniel, said the National Insurance Commission had introduced measures to boost the performance of the insurance sector and increase its contribution to the country’s Gross Domestic Product
Daniel said there had been an increase in the number of policyholders from 500,000 in 2010 to 1.5 million in 2012.
He added that in its quest to deepen insurance penetration, the commission had established a developmental platform called the Market Development and Restructuring Initiative.
The initiative, he explained, was in line with the Federal Government’s Financial System Strategy 2020 development framework with many goals, including promoting public understanding of insurance mechanism; to build confidence in the Nigerian insurance market; to grow the gross premium income; to increase insurance density and contribution to the GDP and; ensure enforcement and monitoring of compulsory insurances.
According to Daniel, the programme has been officially introduced in all the six geo-political zones of the country and the Federal Capital Territory.
He also said NAICOM had embarked on massive sensitisation campaigns across the country to further educate and inform the public about insurance, build confidence and grow the gross premium.
The outcome of these efforts, he noted, were already been felt in the industry and the economy at large.
Some of the improvements, according to him, include the increase in gross premium from N157bn in 2010 to N250bn in 2012, which increased the ratio of premium to the Gross Domestic Product from 0.5 per cent to 0.7 per cent.
He added that companies with foreign equities increased from three to 10 per cent, generating substantial foreign direct investment, while there was equally an increase in local capacity for oil and gas risks from 10 per cent to 48 per cent.
Daniel said insurance penetration was comparatively low in Nigeria and that micro insurance business in particular was largely untapped.
“At the moment, there are at least 112 million potential micro insurance customers in Nigeria. This is a pointer to the immense potential inherent in this segment of the insurance industry,” he noted.
The commissioner said NAICOM had begun the process of fine-tuning a policy framework designed to cater for the low income earners and vulnerable poor in the rural areas.
The commission, he added, was exploring new distribution channels and other intermediaries for the purpose of driving micro-insurance business and a value added proposition for improving market penetration.Insurance firms’ assets decline by N17.7bn by ngcareers