Post by Trade facilitator on Jun 25, 2017 8:16:57 GMT 1
As veritable engine for economic growth, the fledging Nigerian Insurance industry has a lot of yet untapped potentials.
With an annual projected rate of about 19 percent and over 300 billion naira annual gross written premium between 2003 and 2013, the industry has commenced taking its place as an agent of economic development in the country.
Thanks to the strategic industry reforms carried out by the administration of former president Ebele Jonathan and regulators through legislation and insurance of operational guidelines such as the 2003 insurance Act, increased capital requirement in 2007 and the enforcement of the ``No premium/No cover’’ guideline in 2013.
In spite of these measures, however, the insurance industry is still largely dominated by general insurance and a few corporate players. For instance, five (5) top major players (i.e. 12 percent of the existing 59 percent insurance companies) control about 40 percent of the Insurance Industry’s market share while 52 percent or (88 percent) control a paltry 60 percent insurance business.
Such an oligopolistic market situation is possible because Insurance penetration in Nigeria is extremely low at 0.4 percent of the country’s post-released GDP. This unacceptable phenomenon can be attributed to low product innovation, highly fragmented by insurers, negative perception of the industry by stakeholders, poor communication of insurance value to the public, poor infrastructural development, low size of middle class, etc. We need to confront and overcome these challenges if the nation is to realize the full potentials of Nigeria’s insurance industry.
The existence of huge potentials and opportunities for growth and development in the Nigerian Insurance Industry is beyond doubts. The recent entrance of foreign insurance players into the Nigerian market affirms that its prospects are brighter than anyone can imagine.
For instance, AXA the global insurance giant acquired 77 percent stake in Mansard Insurance PLC, Old Mutual, South Africa wholly acquired Oceanic Insurance: Sanlam South Africa acquired 55 percent of FBN Life Assurance Limited while Greenoaks Global Holdings Limited also acquired 92.8 percent of Union Assurance Limited. We must leverage this confidence in our insurance market to impact Nigeria’s Insurance Industry.
Indeed, if appropriate measures are put in place, insurance could be at the beginning of an S-curve growth for the Nigerian economy
It is to address these challenges and reposition the county’s Insurance Industry for sustained growth and development that the Insurance Industry Consultative Council, which comprises all the arms of the industry, has put together The Insurance Industry Mega Conference held in Abuja at Transcorp Hilton Hotel, in 2015.
In addition to its various technical and networking sessions, the Conference provided the council the opportunity to showcase nigeria’s insurance potentials to the rest of the world.
Without doubts, some level of scrupulous enforcements of policies of compulsory insurance and ‘’no premium no cover’’, has significantly helped to improve the liquidity of many insurance companies today.
Happily too, the government has committed to partnering with the Council to ensure that the recommendations of the body are implemented to the letter.
With an annual projected rate of about 19 percent and over 300 billion naira annual gross written premium between 2003 and 2013, the industry has commenced taking its place as an agent of economic development in the country.
Thanks to the strategic industry reforms carried out by the administration of former president Ebele Jonathan and regulators through legislation and insurance of operational guidelines such as the 2003 insurance Act, increased capital requirement in 2007 and the enforcement of the ``No premium/No cover’’ guideline in 2013.
In spite of these measures, however, the insurance industry is still largely dominated by general insurance and a few corporate players. For instance, five (5) top major players (i.e. 12 percent of the existing 59 percent insurance companies) control about 40 percent of the Insurance Industry’s market share while 52 percent or (88 percent) control a paltry 60 percent insurance business.
Such an oligopolistic market situation is possible because Insurance penetration in Nigeria is extremely low at 0.4 percent of the country’s post-released GDP. This unacceptable phenomenon can be attributed to low product innovation, highly fragmented by insurers, negative perception of the industry by stakeholders, poor communication of insurance value to the public, poor infrastructural development, low size of middle class, etc. We need to confront and overcome these challenges if the nation is to realize the full potentials of Nigeria’s insurance industry.
The existence of huge potentials and opportunities for growth and development in the Nigerian Insurance Industry is beyond doubts. The recent entrance of foreign insurance players into the Nigerian market affirms that its prospects are brighter than anyone can imagine.
For instance, AXA the global insurance giant acquired 77 percent stake in Mansard Insurance PLC, Old Mutual, South Africa wholly acquired Oceanic Insurance: Sanlam South Africa acquired 55 percent of FBN Life Assurance Limited while Greenoaks Global Holdings Limited also acquired 92.8 percent of Union Assurance Limited. We must leverage this confidence in our insurance market to impact Nigeria’s Insurance Industry.
Indeed, if appropriate measures are put in place, insurance could be at the beginning of an S-curve growth for the Nigerian economy
It is to address these challenges and reposition the county’s Insurance Industry for sustained growth and development that the Insurance Industry Consultative Council, which comprises all the arms of the industry, has put together The Insurance Industry Mega Conference held in Abuja at Transcorp Hilton Hotel, in 2015.
In addition to its various technical and networking sessions, the Conference provided the council the opportunity to showcase nigeria’s insurance potentials to the rest of the world.
Without doubts, some level of scrupulous enforcements of policies of compulsory insurance and ‘’no premium no cover’’, has significantly helped to improve the liquidity of many insurance companies today.
Happily too, the government has committed to partnering with the Council to ensure that the recommendations of the body are implemented to the letter.
