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Chuks Udo Okonta
Gross Premium Written (GPW) by top life insurance firms were gulped by claims arising from retiree life annuity business in 2020, Inspenonline can report.
This is as drops on yields from bonds and treasury bills, as a result of government policies, have continued to have significant negative impact on retiree life annuity business as it dipped by N29.2 billion, sliding from from N230.2 billion in 2019 to N220.5 billion in 2020.
A look at the financials of two leading life operators showed that one of them generated gross premium written of N22.91 billion and paid claims of N35.81 billion, of which almost 90 per cent was on retiree life annuity.
The result of the second firm showed that it generated N5.96 billion and paid claims of N7.23 billion.
Data obtained from the Nigerian Insurers Association (NIA) by Inspenonline revealed that only one of the retiree life annuity providers posted profit while 11 others posted losses.
According to the NIA the losses was as a result of low returns and unavailability of investment products to match liabilities.
The NIA stated that the retiree life annuity business before the dip, has been growing consistently, adding that the business provided N126.69 billion in 2016; N161.71 billion in 2017; N178.14 billion in 2018; N230.2 billion in 2019 and dipped to N220.5 in 2020.
Worried by the dip, the National Insurance Commission (NAICOM) has asked insurance companies to share information on issues they faced while underwriting annuity. The insurance sector expressed optimism that the information would help deepen the annuity market space in the county and bring more clients to the industry.
