As the economic crunch continues to bite harder in the country, most insured Nigerians have resolved to be paying their premiums on monthly, quarterly and bi-annually, at least, until the economic position improves.
Business 247 Online News findings show that insurance premiums of underwriting firms fell by 30 per cent in the first quarter, with a further slide in the second quarter of 2016, although, analysts expect things a change for the better in the third quarter, as government begins implementation of 2016 budget, which is expected to allow operators in the public sector fulfil their insurance obligations.
The drop in premium income and preference for terminal premium payment, investigation shows, was a result of the sudden drop in disposable income and profit levels of both companies and individuals.
Some insurance operators, who spoke to Business247 Online News in Lagos, lamented the sudden drop in the rate of insurance renewals, noting that underwriters are going through tough times to persuade insurance subscribers to renew their covers.
The Managing Director, FBN General Insurance Limited, Mr. Bode Opadokun, said while most individuals and corporate organisations are sacrificing their insurance budget to meet their more immediate needs, until things change for better, others were requesting for terminal insurance products, a development that is cutting down on the premium generation of underwriters hence, affecting their level of profitability.
According to him, “Premium is now being paid monthly, quarterly and bi-annual instead of annually. This is affecting the profitability of insurers. However, with government starting to implement the 2016 budget, public sector operators will now be liquid to renew their insurances, while this should trickle down to the private sector, in the long run.”
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