By Favour Nnabugwu
GLOBAL insurance premium rates have continued on downward trend quarter-on-quarter for the past four years even as Nigeria is not left out in the decline.
Premium rates, according to Marsh’s Global Insurance Market Index, in Europe declined slightly more in the first quarter of 2017 (Q1’17) over Q4’16. Marsh also finds that prices fell across all major lines of insurance products but the decline in global rate was effectively caused by the US and Asia-Pacific markets.
Though, rate decline moderated globally across property, casualty, financial and professional lines in the first quarter countries in Africa experienced slight depletion in their premium but Nigeria and Egypt were worse hit due to depreciation of the two countries’ currencies.
However, figure from Marsh derived from 90 percent of the broker’s premium, reveals that global rates fell for the 16th consecutive quarter as the soft market continues. They decreased by 2.3 percent in Q1’17, which compares to the previous quarter’s fall of 3.1percent
This is now the fifth consecutive quarter that global rates decline have moderated, having peaked at a five per cent decrease in Q4’15. In Europe and the UK, the story is even rosier for insurance buyers. In Europe rates were down by 4.3 per cent in Q1’17, compared with a fall of 4.2 per cent in Q4’16.
Nigeria’s Commissioner for Insurance, Alhaji Mohammed Kari, in an interview with Vanguard Insurance in Kampala, Uganda, do not believe that the falling premium rates is a threat to Nigeria’s insurance industry but as a result of lack of growth of the sector.
Kari attributed it to lack of appreciation of insurance, stating: “it is the reason the market is simultaneously leading rebranding campaign and re-launching the phase-two of Market Development & Restructuring Initiative (MDRI).”
According to him, “We have started some adverts towards the end of last year up till now, trying to bring people’s attention to insurance. And if we do the grand launching and the industry campaign, there might be changing impression.”