Five insurance companies, Leadway Assurance Company Limited, AIICO Insurance plc, African Alliance Insurance plc, Custodian Life Insurance Limited, and FBN Life Assurance Limited control 71.6 percent of the total life market share of gross premium income generated in the insurance industry in 2016.
The firms in the 2016 financial year generated N89.24 billion out of the total N124.57 billion gross premium of life business during the period, with Leadway leading with N31.59 billion equal to 25.36 percent and AIICO contributing N22.17 billion, equal to 17.80 percent.
As contained in the insurance industry statistical report accessed by BusinessDay, African Alliance followed with N13.42 billion gross premium, translating to 10.77 percent; Custodian N12.15 billion, translating to 9.75 percent; while FBN Life generated N9.91 billion, equal to 7.96 percent.
Out of the total industry gross premium on life business, N67.26 billion was paid out as claims, while they also achieved investment income of N20.15 billion during the review year.
Management expenses, according to the data, were N15.17 billion, while profit after tax from the total review of life business stood at N4.82 billion.
Growing interest of retirees in taking annuity option for retirement benefits as well as increased compliance on group life insurance, particularly Federal Public Service employers, big institutions as provided in the Pension Reform Act 2014, is resulting in monumental growth in life insurance premium.
This development has led to increasing growth in performance of life companies offering annuity, now seen growing by 37 percent as at the end of 2015.
At the end of first quarter 2018, insurer has received cumulatively the sum of N259 billion from retirees who subscribe to annuities for their retirement payments.
According to the second quarter 2018 report of the National Pension Commission (PenCom), a total of 2,652 applications have applied for retirement under life annuity, bringing the total number of retirees receiving their retirement benefits through the annuity plan to 54,471.
Analysts say this is likely to grow over time given that a lot of the retirees under the Contributory Pension Scheme were beginning to be more aware of the benefits of annuity, unlike at the beginning of the pension reform when they did not understood they had choice to make between the available options.
According to the African Insurance Barometer, launched recently by the African Insurance Organisation, individual annuity business is the fastest growing personal line business, particularly in the sub-Saharan Africa, including Nigeria.
On group life insurance, the industry receive as much as N 10 billion annually from the Office of the Secretary to the Government of the Federation for its employees, while the Nigerian National Petroleum Corporation (NNPC) pays on group life insurance premium as much as N2 billion annually.
