With a notable decrease in the purchasing power of many Nigerians, the insurance sector is witnessing a growing preference for group life policies, while interest in individual life policies is dwindling.

According to the first-half 2023 (H1’23) report for the insurance sector released by the National Insurance Commission (NAICOM), group life insurance experienced a year-on-year (YoY) increase of 37.6%, reaching N70.2 billion in H1’23, compared to N51 billion recorded in H1’22.

Conversely, individual life insurance saw a modest 6.5% increase, reaching N67.1 billion in H1’23, up from N63 billion in H1’22.

Further analysis reveals that premium income from group life insurance rose significantly by 66.4% to N48.6 billion in Q1’23, compared to N29.2 billion in Q1’22. In contrast, premium income from individual life insurance dropped by 23.5%, totaling N34 billion in Q1’23, down from N42 billion in the corresponding period of Q1’22.

Group life insurance offers coverage to a group of individuals under a single contract, whereas individual life insurance provides coverage for a specific person.

Analysts attribute this trend to the ongoing rise in inflation, which has eroded the purchasing power of many Nigerians, leading them to opt for more cost-effective group life policies. They predict that this preference is likely to persist in the face of a challenging economic environment.

However, the swift settlement of insurance claims in recent times is expected to continue attracting corporate organizations and associations to the group life insurance sector of the market.

Managing Director of Achor Actuarial Services, Mr. Pius Apere, highlighted the impact of rising inflation on the average Nigerian’s purchasing power. He noted that individuals are increasingly turning to group insurance and placing less emphasis on individual covers as a strategy to mitigate the effects of inflation. Apere also emphasized the insurance sector’s improved claims settlement capabilities, which have been a key factor in attracting more people to the industry.

Similarly, Managing Director of Boof Africa Insurance Brokers, Mr. Olumide Fatogun, pointed out that the affordability of group life insurance is driving more Nigerians to opt for this option, especially as inflation rates surge. He mentioned that this shift is part of a broader strategy to cope with rising costs of living.

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