The Nigerian insurance sector has over the last three year remained toast of potential foreign investors. Consequently, the sector in 2015 witnessed influx of foreign players who deemed the market the best to play. This, among other major events, Our correspondent, NGOZI ONYEAKUSI reports help to shape the year.
Endowed by huge population in excess of 170 million, high rate of urban population and emerging middle-class which the sector continues to explore, Nigeria insurance industry has over the last three year remained the toast of high portfolio global insurers.
The National Insurance Commission (NAICOM) recorded that Liberty Group of South Africa, Prudential Life Company of UK among other 12 foreign firms desired to be part of the domestic market in 2015.
The Former Commissioner for Insurance, Fola Daniel recently observed that the Nigerian insurance industry was becoming so popular not only in Nigeria but across Africa that it has occupied the second position in Africa from the fifth position it occupied between 2012 and 2013. “The potential is huge, and we have what it takes to lead the rest of Africa in the next two to three years if operators take advantage of numerous opportunities in the market”, Daniel assured.
The sector has in the recent time recorded some growth, though it is yet to get at the expected high.
But experts in the sector were of the view that the entrant of these icons will engender healthy competition within the industry which will in turn promote growth.
According to NAICOM admitting credible foreign investors into the market will not only engenders growth but will assist the government to tackle unemployment challenges in the country.
As at the end of first quarter, 2015, the Nigerian insurance industry total asset has risen to N793.6 billion while the total premium as at the end of 2014 according to NAICOM stood at N302 billion.
The sector in the same first quarter of 2015 end recorded gross premium income to the tune of N97.017 billion compared to the N302.105 billion written in the whole of 2014, thus positioning the sector for further growth.
This figure indicates a growth rate of about 28 per cent considering the average N75.5 billion quarterly premium recorded in 2014
Major events in 2015
The review of activities in the insurance industry in 2015 will be incomplete without noting the exit of the Former Commissioner for Insurance, Mr Fola Daniel who have served the commission meritoriously from 2007 to July 2015.
Following the expiration of Daniel’s tenure as Commissioner, President Muhammadu Buhari within the period appointed Alhaji Mohammed Kari as the new commissioner. Kari’s appointment which is for a term of four years in the first instance, took effect from Friday, July 31, 2015. Kari started his career with Royal Exchange Assurance in 1979.
He later worked with Yankari Insurance Company until 1989, when he was appointed Executive Director in Niger Insurance Plc. In January 1992, he was appointed Managing Director/Chief Executive Officer of Nigeria Reinsurance Corporation, a position he held until March 1993 when he was appointed Managing Director of NICON Insurance Corporation. He served in that capacity until January 2000 when he resigned. He returned to insurance management in 2007 as the Managing Director/Chief Executive of Unity Kapital Assurance Plc, were he served for four years.
Similarly, NAICOM, within the period inaugurated fourteen insurance companies to operate the Technical Management Board of the Energy and Allied Risks Insurance Pool of Nigeria (EAIPN).
The companies include, Leadway Assurance Company limited, Custodian & Allied Insurance Plc, Aiico Insurance Plc, Lasaco Assurance Plc, Royal Exchange Insurance Co. Ltd, Consolidated Hallmark Insurance Plc, and Sovereign Trust Insurance Plc.
Others are Linkage Assurance Plc, Industrial And General Insurance Plc, Nigerian Agric Insurance Corporation (NAIC), Sterling Assurance Company Limited, Prestige Assurance Plc, NEM Insurance Plc and NSIA Insurance.
In the same vein, the Chartered Insurance Institute of Nigeria, CIIN, within the period changed mantle of leadership as Lady Isioma Chukwuma emerged the new president following the completion of office of the former president of the council,Mr Bola Temowo.
Delivering her acceptance speech at her investiture ceremony, Chukwuma said that her administration will focus on promoting insurance awareness by increasing the visibility of insurance in national consciousness.
Chukwuma said that she will also focus on promotion of the ideals of the Insurance Industry Consultative Council, IICC, as the establishment of the lICC and its landmark success in enthroning insurance industry unity cannot be over-emphasize.
The year as well witnessed the investiture of Kayode Okunoren as 18th president of Nigeria Council of Registered Insurance Brokers (NCRIB).
Okunoren while unveiling his nine-point agenda, which according to him would take the broking sector to lofty heights, stressing that he would be committed to taking insurance broking practice and the NCRIB higher than he met them.
According to him, professionalism, mentorship, improved collaboration with NAICOM and other governmental bodies increased tempo of lobby with government and other stakeholders, greater positive collaboration with government, aggressive advancement of members’ interest, improved image of brokers, international relations and man-power development would be his main areas of focus.
NCRIB within the period continued to intensify effort aimed at driving out fake insurance brokers practicing in the country while NAICOM has never relented in creating enabling environment for the sector, which will in turn promote insurance business in country to enhance penetration and patronage.
Mergers and acquisition in the sector
Before the period under review, companies including Old Mutual, NSIA, Metropolitan Life, Sanlam, Greenoaks and AXA have established their presence in Nigeria through acquisition and partnerships, and this analysts believe have started recording significant impact on the market.
Old Mutual, one of Africa’s biggest insurers headquartered in the United Kingdom acquired had 70 per cent stake in Oceanic Life Insurance Limited, AXA, a France based world renown insurance group, acquired majority shares in Mansard Insurance. Group NSIA, a company based in Abidjan, Cote d’Ivoire, bought 96.15 per cent equity of Diamond Bank Plc in ADIC Insurance Company Limited.
Sanlam Emerging Markets, a group of South Africa-based investors, bought 35 per cent stake in FBN Life Assurance Limited with First Bank of Nigeria Plc owning the remaining 65 per cent among others.
On the merger side, Custodian and Allied Insurance Plc, have merged with Crusader (Nigeria) Plc having secured the nod of their shareholders through the court, while FBN Life recently concluded acquisition of Oasis Insurance, now, FBN Insurance, underwriting both life and non life business. Cornerstone Insurance and Fin Insurance have done theirs half way. The merger became necessary according to operators to equip local players ample opportunity needed for development of capacity to ensure favorable competition.
Growth Strategies/ Prospects for 2016
Experts hinged the growth of insurance industry to right product, innovation and healthy competition between local players and their foreign counterparts. They are optimistic that the presence of foreign insurers in the Nigerian market would in no distant time impact on penetration and service delivery.
“The few foreign players that have fully settled into business are doing their best to navigate the market. They have brought the impact of their financial capital to bear positively on the available underwriting capacity. However, there is still a lot of work to be done by the foreign players and indigenous counterparts to deepen penetration especially in the retail segment.” The former President, CIIN and chairman, Insurance Industry Consultative Forum, Bola Temowo, stated that the industry was poised at addressing many of the challenges facing the sector in order to sustain current development in the market that has attracted the attention of many foreign investors.
“Our market is growing and becoming the goldmine people outside our jurisdiction have noticed, and we must do everything to sustain this growth”, said Temowo.
Culled from Peoples Daily Newspaper