Nigeria's insurance industry is open to foreign multinationals - BMI

Nigeria's insurance industry is open to foreign multinationals - BMI

Chuks Udo Okonta

The Nigeria’s insurance market is not entirely closed to foreigners, Business Monitor International Limited, has said

The United Kingdom (UK) firm, said in its Nigeria Insurance Report 2012, that recent entry of some foreign underwriters into the insurance market has proved that foreign firms can access the industry, adding that the United Bank of Africa (UBA) Metropolitan joint venture shows that Nigeria’s market is not entirely closed to foreigners.

BMI canvassed that any change in the regulations that have the effect of facilitating the entry to the market by foreign multinationals would be beneficial.

It said: "Anecdotal evidence suggests that life insurance has been boosted by the

introduction of compulsory group life policies. Improvement in the regulatory environment could boost the sector.

"Any change in the regulations that have the effect of facilitating the entry to the

market by foreign multinationals would be beneficial. We note, though, that the UBA

Metropolitan joint venture shows that Nigeria’s market is not entirely closed to foreigners.

The rapid growth in the (still small) UBA Metropolitan joint venture indicates that Nigerians will

buy long-term insurance from organisations that they have confidence in."

It expressed worry over the low level of transparency across the sector, adding that with such challenge, it is difficult to know how the various companies are faring.

It also highlighted on the lack of trust among operators, stressing that an industry in which none of the protagonists trust or co-operate with each other is one that runs a risk of becoming irrelevant.

BMI also expressed fear that the 2010 Local Content law which mandates that at least 70 per cent of insurance bought by Nigeria’s energy sector must be sourced from local companies has the potential to cause havoc if the insurers fail to price the risks properly.