As the 2017 business year draws to a close, insurance companies in the country are optimistic that the Federal Government’s recovery plan, consistent fiscal policy as well as the 2018 budget proposal for an increase in capital projects will jumpstart a lot of activities in the economy, which will require insurance backing to become successful.
They also believe that third quarter performance, which showed clear signs of recovery after the country’s economic recession with positive bottom lines for most public quoted insurance companies would be sustained in the fourth quarter of 2017.
Segun Omosehin, managing director/CEO, Mutual Benefits Assurance Plc in interview with BusinessDay said though insurance got its fair share of the economic recession that impacted on business in the outgoing year, business will come out strong at the end of 2017.
Omosehin said “As at the end of the second half we had a turn in terms of the performance of the industry and that actually went on to the end of third quarter, and hopefully it will be same at the end of fourth quarter, and from analysts’ predictions it’s going to end on a positive note.”
“Even though the economy was challenging as it were, as an industry we recorded some growth, though marginal looking at the results of some quoted companies.”
He stated that going into 2018, “we are quite optimistic looking at the recovery plan of the Federal Government and consistency in the fiscal policy put in place by the Central Bank of Nigeria. Consistency has been good for the economy; we hope it will be sustained.”
Omosehin noted that as an industry, “we are embarking on an awareness campaign, a kind rebranding targeted at changing the perception of the insuring public about our services and educating them on the benefits of insurance. This is coming as joint effort by all arms of the industry to clear some misgivings and bad image of the industry, and we hope this will yield a positive result,” Omosehin stated.
On the business side, he also said” we are quite excited by the amount of money voted on capital project in the 2018 Appropriation Bill and that is what drives the economy. We are hopeful that it will jumpstart a whole lot of activities, and we are hoping that these resources will be allocated to infrastructure like rails among other things.”
Pius Apere, managing director/CEO, Linkage Assurance Plc said “we are positive about next year since we are beginning to see some stability in the economy.”
According to him, the industry is positioning to take advantage of the transformation and regulatory efforts of the National Insurance Commission (NAICOM), which is intended to deepen insurance penetration in the economy, and provide huge growth prospect for underwriting firms.
Jide Orimolade, managing director/CEO, Law Union &Rock Insurance Plc said that the Federal government’s 2018 budget proposal of N8.612 trillion with an improvement on capital expenditure which is 30.8 percent of the total budget is a positive development.
“With increase in oil prices, improved revenue, decrease in domestic borrowing( and plan by Federal government to reduce their borrowing share to 60 percent domestic and 40 percent foreign) with signal of decrease on interest on treasury bills, there would definitely be an improvement in economic performance.”
Orimolade stated that all things being equal the insurance sector is expected to have a better share, better penetration and improve gross premium written in the coming year.
The Nigerian insurance industry in the 2016 financial year recorded an estimated gross premium income of N380 billion, a 22.2 percent increase from N311 billion recorded at the end of the financial year in 2015, according to the Nigerian Insurers Association.
“We also expect that on-going partnership between insurance industry and state governments midwifed by NAICOM to grow income from the compulsory policies will pick up in the coming year,” Orimolade added.
