The-Future-of-and-Opportunities-in-the-Insurance-Industry.pptx

Insurance is a complex topic, and 3000 words would be more than enough to delve into its intricacies. To keep things concise, let's cover the basics:
* What is insurance?
Insurance is a risk management tool that financially protects individuals and businesses from potential losses. By paying premiums to an insurance company, you get coverage for specific events, such as car accidents, illnesses, or property damage. If one of these covered events occurs, the insurance company reimburses you for some or all of the associated costs.
* How does insurance work?
There are three key parties involved in insurance:
* Insurer (insurance company): The company that provides the insurance coverage and pays out claims.
* Insured (policyholder): The person or entity who purchases the insurance policy.
* Beneficiary: The person or entity who receives the payout from the insurance company in the event of a covered event (e.g., your spouse in a life insurance policy).
Here's a simplified breakdown of how insurance works:
* The insured pays premiums to the insurer. The premium amount is based on various factors, including the type of insurance, the level of coverage, and the insured's risk profile.
* If a covered event occurs, the insured files a claim with the insurer. The claim includes details about the event and supporting documentation.
* The insurer investigates the claim. They may assess the damage, verify the details, and determine if the event is covered under the policy.
* If the claim is approved, the insurer pays out the benefit to the insured or beneficiary. The payout amount is typically limited by the policy's coverage limits.
* Types of insurance
There are many different types of insurance available, each catering to specific risks. Some common types include:
* Life insurance: Provides a financial benefit to the beneficiary upon the policyholder's death.
* Health insurance: Helps cover medical expenses incurred due to illness or injury.
* Homeowner's insurance: Protects your home and belongings from damage or loss caused by fire, theft, or other covered events.
* Auto insurance: Provides financial protection for car accidents, including damage to your car, injuries to yourself and others, and liability for property damage.
Understanding insurance can help you make informed decisions about protecting yourself financially. If you're considering getting insurance, it's important to compare quotes from different insurers and carefully review the policy details before making a purchase.
Insurance is a complex topic, and 3000 words would be more than enough to delve into its intricacies. To keep things concise, let's cover the basics:
* What is insurance?
Insurance is a risk management tool that financially protects individuals and businesses from potential losses. By paying premiums to an insurance company, you get coverage for specific events, such as car accidents, illnesses, or property damage. If one of these covered events occurs, the

1. WIP THE FURTURE OF AND OPPORTUNITIES IN THE INSURANCE INDUSTRY WOLE OSHIN: Group Managing Director, Custodian Investment Plc.

2. Source: NCRIB, NIA Digest, 2017 A snapshot of the Nigerian Insurance Industry 601 Insurance Brokers ~ 25,000 Agents 57 Loss Adjusters 3 Actuarial Firms Insurance Regulator NAICOM Life insurance 15 companies N2bn Capital requirement Non- life insurance 29 companies N3bn Capital requirement Re-insurers 2 companies N10bn Capital requirement Composite Insurance 13 companies N5bn Capital requirement Takaful Insurance 2 companies

3. Insurance in Nigeria: Present Increased public awareness via industry campaigns to deepen insurance penetration Steady premium growth from NGN 100bn in 2007 to NGN 345bn in 2018 (245% growth) Regulatory drive for financial inclusion to drive insurance growth The insurance penetration in Nigeria is less than 1 per cent. On the other hand, the industry’s premium as a percentage of GDP is 0.33 per cent, ranked 87 th in the world as at 2018. Source: NIA, NAICOM, pwc , Sigma More diversified professional workforce now attracted to the industry

4. Insurance Density: Premiums per capita in USD Insurance Penetration: Premiums as a % of GDP Source: Swiss Re Reports Nigeria still on the development path as compared to select countries The depth of insurance in Nigeria, as measured by the insurance premium relative to GDP is 0.3% post-rebasing, which is abysmally low in comparison with other major African countries (Kenya: 2.37%, and South Africa: 12.89%). South Africa has the highest insurance penetration and density in Africa. Nigerian insurance industry compared with similar economies The statistics below shows the immense potential growth that lies within the insurance industry in Nigeria. 2015 2016 2017

5. Industry Performance (2010 -2017) 1/2 Non- Life Life Gross Premium NGN Bn Investment Income NGN Bn Source: NIA digest Life insurance contribution to Total Gross premium increased from 27% in 2010 to 44% in 2017. Total gross premium grew by 96% from 2010 to 2017. CAGR 10% CAGR 28%

6. Industry Performance (2010 -2017) 2/2 Source: NIA digest Total Assets NGN Bn Profitability NGN Bn The Industry Profitability has consistently increased over the years from 2011 to 2017. Improved underwriting capabilities, focus on strategic classes and insurance penetration is expected to further growth. CAGR 9% CAGR 24%

7. Strengths/Opportunities Improved industry financial performance over the years Low Insurance penetration Compulsory products Sale of products through alternative distribution channels e.g. Telcos , Car Shops, Travel Agencies etc. Vastly untapped markets creates opportunities for growth Attracts FDI from global investors

8. Weaknesses Negative perception of the industry and lack of trust still persists Challenges in the enforcement of compulsory insurances. Scarcity of human capital in certain specialized areas e.g. Actuaries. The industry is highly fragmented and competitive, thereby affecting the pace of growth in overall market size. 1 2 3 4

9. Insurance in Nigeria: Future The future would be shaped by the implementation of the new guidelines on insurance which was released on 20 th May, 2019. All Insurance companies have a deadline of June 2020 to increase their Paid-Up Capital from =N=2billion to =N=8billion for Life, =N=3billion to =N=10billion for Non-Life, Composite Insurance Companies =N=5billion to =N=18billion and =N=10billion to =N=20billion for Reinsurance Companies. Post-consolidation, various reports from analysts have projected between 25-30 Companies. It will encourage Mergers and Acquisitions. Confidence and trust would be restored in the industry. Regulatory oversight and alignment with new ways of doing business would be introduced It will introduce creativity in product development. IMPACT OF NEW CAPITAL Cut-throat pricing and competition as a result of cash flow underwriting would stop. Insurance funds will become strategic in government goal setting and planning through disaster recovery mechanisms & long-term project financing (infrastructure funding etc.) Diversified human capital would be attracted to the industry: Data Analysts, Actuaries, Investment Analysts etc. Technology would become central to operation because of the efficiency it brings to customer satisfaction and experience. The use of data analytics in assessing risks would become commonplace, thereby entrenching a risk/reward structure.

10. THANK YOU Contact Us! 16A, Commercial Avenue, Sabo, Yaba, Lagos. Tel: [phone]-CUSTODIAN, ([phone] Fax: [phone] P. O. Box 2101, Lagos. Email: [email protected]; [email protected] Website: www.custodianplc.com.ng