As a veritable engine of economic growth, the fledgling Nigerian Insurance industry has a lot of untapped potentials. With an annual growth rate of about 19% and over N300 billion annual gross written premium between 2003 and 2013, the industry is set to take its place as an agent of economic development in the country. Thanks to the strategic industry reforms introduced by the government and regulators through legislation and issuance 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 top major players (i.e. 12% of the existing 59 insurance companies) control about 40% of the Industry’s market share while 52 (or 88%) control a paltry 60% insurance business.
Such an oligopolistic market situation is possible because Insurance penetration in Nigeria is extremely low at 0.4% of the country’s post–rebased GDP. This unacceptable phenomenon can be attributed to low product innovation, highly fragmented 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 realise 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 we can imagine. For instance, AXA, the global insurance giant acquired 77% stake in Mansard Insurance PLC, Old Mutual, South Africa wholly acquired Oceanic Insurance; Sanlam South Africa acquired 55% of FBN Life Assurance Limited while Greenoaks Global Holdings Limited also acquired 92.8% of Union Assurance company 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 country.
It is to address these challenges and reposition the Nigerian 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 holding in Abuja at Transcorp Hilton Hotel, from 26th July, 2015 to 28th July 2015. The Theme of the conference is “DEVELOPING INSURANCE BUSINESS FOR NATIONAL GROWTH”.
In addition to its various technical and networking sessions, the Conference will provide the Council the opportunity to celebrate and honour the Commissioner for Insurance, Mr. Fola Daniel for his immense contributions to the Industry through his various reforms. Without doubts, his scrupulous enforcement of the policies of compulsory insurance and “no premium no cover “, has significantly helped to improve the liquidity of many insurance companies today.
Happily, the government has committed to partnering with the Council to ensure that the recommendations of the Conference are implemented expeditiously. You therefore cannot afford to miss this conference as it promises to set a new agenda for the trust-driven insurance industry in Nigeria.