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Chuks Udo Okonta
Life Insurance operators seemed divided on the profitability of annuity business as some considered it volatile, while others seek it as gold mine.
Inspenonline gathered that those that considered the business to be volatile are gradually reducing their intake of annuitants, while those on the other side are making frantic efforts to enrol more annuitants.
According to the Nigerian Insurers Association (NIA), annuity provided the largest chunk of premium income to life business, amounting to N77.77 billion, which is 48 per cent of the total Life Insurance premium for 2017.
The NIA stated that Life Insurers earned N44.58 billion, 28 per cent from group life and N39.27 billion from individual life business.
A breakdown of net written premium earned by some companies showed that Leadway Assurance Company Limited, posted N56.17 billion; Custodian Life Assurance Limited, N7.71 billion; FBNInsurance Limited, N6.76 billion; AIICO Insurance Plc, N3.22 billion and ARM Life Plc, N2.71 billion.
On underwriting profit from annuity, a total of N5.25 billion was recorded. Eight firms made profit while four recorded losses.
The National Pension Commission (PenCom) said it approved a total of 5,243 applications for annuity plan in third quarter 2017, and the 5,243 retirees paid annuity premium of N27.74 billion to life insurance companies.