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 Daily
Independent Online.
* Wednesday, July 07, 2004.
Nigeria trails S. Africa, Morocco, Zimbabwe in premium income
Stories by
Bethel Obioma
Insurance Correspondent, Lagos
Nigeria’s dismal
performance in the continent’s insurance industry persisted in the 2003
financial year, as the nation’s premium income placed it sixth among nine
nations surveyed by Swiss Re.
According to Swiss Re’s Sigma
report, South Africa remained the best performing African nation, as it
posted a premium income of $25.4 billion (about N3.43 trillion),
representing 0.86 per cent of the world’s total premium income for the
year under review.
Interestingly, South Africa
realised a greater portion of its premium income from its life insurance
sector, one that has remained an albatross in the local industry in
Nigeria. South Africa’s life arm earned $20.7 billion (about N2.79
trillion) last year, Nigeria’s posted a paltry $77 million (about N10.3
billion).
According to experts, the
dismal performance of the life insurance sector in Nigeria is not
far-fetched, as the nation is said to cover less than one per cent of her
insurable population, making her one of the countries with the lowest
insurance coverage in the world.
While South Africa and some
other African nations are doing much better than Nigeria, insurance
coverage in the United States is 78 per cent, United Kingdom, 65 per
cent, Singapore, 62 per cent, India, 27 per cent and Malaysia, 20 per
cent.
The premium in percentage of
Gross Domestic Product (GDP) in life insurance penetration in Nigeria is
poor compared to other African countries. In fact, the low insurance
awareness is demonstrated by the low patronage of life insurance business
that represents only 10 per cent of the industry’s premium income.
Experts say given the vital
role of life insurance business in mobilising long term funds for
accelerated economic growth and diversification of the economy, the need
for fast- paced development of this sector should be paramount to
insurance operators.
Chairman and Chief Executive,
Marketage Communications Limited Mr. Raphael Okunmuyide, explained that
the dearth of data in terms of critical performance indices of the
industry was a major restraint to effective strategic planning in the
life sector.
He underscored the need for the
industry to organise market research for assessing market opportunities
in each class of business to formulate appropriate marketing strategy.
He urged insurers to embrace
the re-positioning strategy that involves the enhancement of the position
of current product lines by changing and extending their image through
mass advertising or personal selling. North Africa nations, Morocco and Egypt, also posted
impressive results to emerge second and third respectively.
Morocco recorded a total
premium income of $1.29 billion (about N173.9 billion), while Egypt
posted $556 million (about N76.4 billion).
Zimbabwe placed fourth in
Africa’s premium income with a result of $482 million (about N65.1
billion), representing 0.02 per cent of the world’s total premium income.
Tunisia placed fifth with $456
million (about N61.6 billion), Nigeria, sixth, grossing a premium income
of $422 million (about N56.9 billion), Kenya, seventh with $411 million
(about N55.4 billion), Algeria earned $384 million to place eighth and
Mauritius was in the rear with a premium income of $$241 million (about
N32.5 billion).
Meanwhile, the report showed
that the direct world insurance premium income last year hit $2.94
trillion, as against $2.63 trillion recorded in 2002 in the survey that
analysed the premium earned from both life and non-life sectors of the
insurance industry in 88 countries. The United States, where the industry
is divided into life/health and property/casualty sectors ranked first
among the countries surveyed with a premium income of $1.06 trillion.
This represents 35.89 per cent of the world’s total premium income. Japan
posted $478.8 billion, United Kingdom $246.7 billion, Germany $170.8
billion, France $163.7 billion, and Italy $111.8 billion to place second,
third, fourth, and fifth respectively.
Swiss Re’s survey on world
premium income features countries that are required to have reliable data
and direct premium income of over $100 million from 1994 to 1998, over
$150 million from 1999 to 2002, and, at least, $200 million in 2003.
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