Oil and gas records the lowest insurance retention rate in Nigeria

Based on a report released by the National Insurance Commission oil and gas had the lowest insurance retention rate.
This is owing to its nature of enormous capital and professional requirements.
Car insurance maintained its lead as the highest retaining portfolio with a retention ratio of about 93.5%.

According to the National Insurance Commission, (NAICOM) the oil and gas industry had a premium retention rate of 36% in 2022, making it the underwriting industry with the lowest premium retention in the nation.

The NAICOM statistics department's quarterly report on the insurance industry for the fourth quarter of 2022, "Bulletin of the Insurance Market Performance," included this information.

According to the survey, the average premium that all insurance businesses were able to keep locally throughout the time period under consideration was 71.3%.

Part of Naicom’s report reads, “the oil and gas portfolio lamentably remained a challenging angle in the market owing to its nature of enormous capital and professional requirements.

Consequently, the retention performance in the current period sustained its prior position when compared to the third quarter as evidenced by the overall non-life business ratio of 55%, slipping from about 56.6% held in the prior period.”

According to the research, despite operational constraints brought on by the national and international economies, the sector maintained encouraging company retention rates that were indicative of the market's resiliency and growing capacity.

In the report, NAICOM stated that the insurance claims recorded during the fourth quarter were N318.2 billion, an increase of 31.2% over the previous quarter.

It claimed that rising consumer confidence, market expansion, and expanding consumer knowledge were all contributing factors to this achievement. Similar to this tendency, over the same time, net claims paid increased by around 17.9% QoQ and totaled N244.3 billion.

Insights into the non-life market revealed that motor insurance was in the lead when it came to settling claims relative to gross claims, with a recorded 92.3%, an improvement of nine points from its previous position.

The only class with a below-average proportion was fire insurance, which had the lowest percentage at roughly 46.3%.

The other portfolios of general accident insurance (80.7%), oil & gas (51.6%), marine & aviation (74.4%), and miscellaneous insurances (86.1%) recorded a ratio of paid claims to total claims reported that was higher than the average.

On the other hand, the life insurance sector recorded two points less net claims paid relative to total claims compared to the position maintained in the preceding period of 94.6% in 2021.