Top international insurance firms, among them, Liberty Group of South Africa and Prudential Life Company of UK are at advanced stages in their push to enter the Nigerian insurance market, BusinessDay investigations show.
The firms which have expressed the desire to position in Nigeria which is expected to lead the continent’s underwriting market in the next two years, ahead South Africa and Egypt, are already meeting regulatory authorities.
BusinessDay investigations show that 12 other foreign firms are currently in talks with the regulator, the National Insurance Commission (NAICOM) in the quest for a stake in the country’s growing market.
NAICOM is however said to favour investors in search of acquisitions, rather than those looking for new licenses.
The development is expected to make the market which currently ranks second in the continent, behind South Africa, to take the lead.
Nigeria’s insurance industry, with 60 underwriters, raked in over N300 billion premium in 2013 on the strength of growing confidence and adherence to strict corporate governance, which now endears it to foreign direct investors.
“In the last six months, we have had more than 12 enquiries from foreign companies that want to operate here and we have told them that we are not giving out new licenses but we prefer the acquisition of an existing company” said Fola Daniel, the insurance commissioner.
Although Daniel declined to name the prospectors, he noted that Prudential Life in the United Kingdom, had also made inquiries through a top ranking British government official.
The interest from the firms which are from economies where insurance is highly appreciated is spurred by the gains by Zaplam, in partnership with FBN, Old Mutual and the Metropolitan, the three South African insurance giants currently operating in the Nigeria.
As at the end of first quarter 2015, the Nigerian insurance industry’s total assets had risen to N793.6 billion, while the total premium as at the end of 2014 according to the National Insurance Commission(NAICOM), stood at N302 billion, with insurance penetration of still less than 1percent. This suggests huge potential that is yet untapped, a market analyst said.
BusinessDay investigations further reveal that Nigeria’s Unic Insurance, a life insurance company and Equity Assurance, a non-life company, are among the companies in the inestors focus.
The commissioner attributed the development to improved regulation in the industry and other market development efforts, including implementation of compulsory insurances, micro insurance and Takaful, which have widened growth opportunities.
Bola Temowo, president, Chartered Insurance Institute of Nigeria (CIIN) and chairman, Insurance Industry Consultative Forum, stated that the industry is set to address many of its challenges, in order to sustain the attention of foreign investors.