The narrative about Nigeria’s large uninsured risks has caught global attention with several potential investors coming from developed markets to have the first assessment of the brief they had that prompted them to venture out before rolling out, an investment decision.
After several potential investors sorties, some have landed good targets while others are monitoring the situation hoping to make another rewarding landing.
With a large population that is swinging population figures between 160 to 200 million, investors see this as a potential market to explore despite the discouraging penetration rate of less than 2.5%.
Nigeria indeed has the largest economy in Africa, but insurance presence is at the lower rungs of the economic ladder because the life and retail market is not matching the strides of corporate policies, which is still keeping a comfortable lead. The life and retail businesses are coming after, but still a distance away.
Despite the poor ranking, the Commissioner for Insurance, Mr. Sunday Thomas, said the nation’s insurance industry is attractive for its potentials. This remark was contained in the keynote address at the webinar promoted by First Law & Impact Consulting in Lagos, the second in the series.
Thomas, said the state of the nation insurance market lands it among the largest in the world with un-insured customers in a single market.
He followed this up with comments that the situation could be reversed because of the market potentials are enormous and with the policies being rolled out and the buy-in of the operators, good results are expected. “However, reaching this potentials has been difficult with the sector fragmented and indeed in need of consolidation,” he said. The dose of consolidation is already served and operators are coming to terms with the approach that suit their business continuity interest.
On its part as the regulator, he said government has used policy intervention to increase the rate of policy customers “but the execution of this policies has proven challenging as the long awaited increases in minimum capital requirement is yet to be implemented.”
As the regulator pushes the consolidation through new minimum capital set to be concluded by September 2021, it is pressing on with the licencing of four new insurance companies, two general, two life companies. Also following after is a new process to licence a reinsurance firm.