RPT-Fitch: Nigerian Insurance Industry ready for further consolidation

　

Fitch Ratings says in a new report that it believes that the Nigerian insurance market is ripe for further consolidation as insurers seek to increase scale and investor interest develops.

Fitch expects foreign investors seeking an entry point to the market to continue to do so through acquisitions of existing insurers, or partnerships with local banks. Thorough due diligence will remain a challenge to the acquisition of existing insurers, despite improvements in corporate governance.

Fitch believes that consolidation in the industry, combined with technological improvements in administration and distribution, could lead to a reduction in operational costs. Insurers that succeed in reducing costs could rapidly gain market share by passing on most of the benefits to consumers.

The insurance industry is poised to benefit from continued significant economic growth and favourable demographic factors in Nigeria. Moreover, insurance coverage is currently low with a weak insurance culture among consumers and market growth could be stimulated by improved consumer awareness and enforcement of minimum compulsory insurance cover as required by law.

The special report "Nigerian Insurance" is available at www.fitchratings.com or by clicking on the link below.

Link to Fitch Ratings' Report: Nigerian Insurance Market - Industry Ready for Further Consolidation

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Source Reuters