Nigeria Liability Insurance Pool Sees 51.6% Increase in Gross Premiums for 2023

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The Nigeria Liability Insurance Pool (NLIP) reported a 51.6% increase in its gross premium earnings for 2023, reaching N1.79 billion, up from N1.18 billion in 2022. This significant growth was primarily driven by the rise in premiums for third-party motor insurance, which took effect in January 2023.

The National Insurance Commission (NAICOM) implemented a directive on January 1, 2023, raising the premium rates for motor insurance in Nigeria. Under the new rates, private vehicle owners who previously paid N5,000 for a N1 million Third Party Property Damage limit are now required to pay N15,000 for N3 million coverage. Similarly, owner goods vehicles must pay N20,000 for N5 million claims, and staff buses are to pay N20,000 for N3 million claims.

At the 14th Annual General Meeting of the Pool in Lagos, NLIP Chairman Gboyega Lesi attributed the growth in gross premium to NAICOM’s review of third-party premiums. “The increase in gross premium can directly be attributed to the review of third-party premiums by NAICOM, which took effect from January 1, 2023,” Lesi stated.

Lesi also noted a significant rise in claims expenses, which grew by 61% from N297.3 million in 2022 to N478.6 million in 2023. This increase was mainly due to the revised third-party liability limits and the high inflation rate in Nigeria. Additionally, the adoption of the fire tariff with a four-year moratorium for full implementation contributed to the growth in premium income.

Despite the rise in claims expenses, NLIP posted an impressive underwriting surplus of N533.4 million in 2023, showcasing operational efficiency and prudent risk management. The Pool’s total assets increased by 39%, from N1.3 billion in 2022 to N1.8 billion in 2023.

### Outlook for Nigerian Insurance Sector in 2024

Lesi expressed optimism for the Nigerian insurance sector in 2024, targeting growth despite the industry’s challenges. He highlighted the underdeveloped state of the insurance industry, which has been hindered by various economic problems and stratified income levels. However, he noted that increasing disposable incomes and rising confidence among businesses and consumers would facilitate ongoing growth.

The expansion of the middle class, contingent on continued economic growth and stabilized inflation, will be crucial for the sector’s development. Lesi also pointed out the positive impact of leadership changes across the industry due to the implementation of the Code of Corporate Governance. These changes are expected to enhance transparency, accountability, and effectiveness within the sector, bringing fresh perspectives and innovative approaches to leadership roles.

### Performance of the Nigerian Insurance Industry in 2023

The NLIP provides reinsurance services for its members’ third-party liabilities, including motor and general third-party liabilities, workmen’s compensation, employer’s contingent liabilities, and builders and occupiers liabilities, among others. In 2023, the Nigerian insurance industry achieved significant growth, with gross written premiums surpassing N1 trillion for the first time, compared to N790 billion in the previous year. The total assets in the industry reached N2.67 trillion, with capitalization amounting to N851 billion as of December 31, 2023.

Peter Okafor
Peter Okaforhttp://Naija247news.com
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