Nigeria’s insurance industry is steadily witnessing increase in interest from major companies abroad.
Many of the companies are specifically attracted by improvements in headline indicators and motivated by low penetration rates in a rapidly expanding population, coupled with moves to broaden product options to include sharia-compliant policies.
With a population of over 168 million growing at 2.5 per cent a year – along with a steady GDP growth of 6.3 per cent in 2014, Nigeria offers sizeable potential for insurers albeit in a crowded market.
According to the latest figures from the market regulator, the National Insurance Commission (NAICOM), there are 58 policy writers operating at present, 29 of which are general insurance firms, 15 life insurers and the remaining 14 composite insurers offering a full range of services. Recent NAICOM data shows that more than three million Nigerians have some form of insurance, up from less than one million in 2007. However, coverage rates vary, with higher levels for property and automotive insurance and a low take-up of personal policies such as life or health.
With greater acceptance of insurance products, premiums and assets have soared over the past eight years. Gross premiums rose from less than N100 billion ($502 million) in 2007 to N302 billion ($1.51billion) at the end of 2014 while asset values more than doubled over the same period from
N347.1 billion ($1.74 billion) to N711.4 billion ($3.57 billion), the NAICOM figures show.
N347.1 billion ($1.74 billion) to N711.4 billion ($3.57 billion), the NAICOM figures show.
Speaking with LEADERSHIP on the growth of the industry under the outgoing commissioner for insurance, Fola Daniel, the director-general of the Nigeria Insurers Association (NIA) Mr Thomas Oluwadare, said that despite the positive policy direction of the NAICOM, the Nigerian insurance market is largely untapped. However, the rise in premiums is attracting new investors, in spite of the large number of existing players as more than 12 foreign insurers, including the United Kingdom’s Prudential Life and Liberty Group of South Africa, are already in talks with regulators to enter the market.
The commissioner for insurance, Fola Daniel, said in late June that the regulator’s preference was for potential entrants to buy into existing firms rather than be issued new licences.
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