Insurance faces economic challenges, but new government gives hope

Nigeria’s insurance market is being confronted by a difficult operating environment as fluctuating oil prices threaten the country’s economic expansion. Yet despite this uncertain backdrop, the insurance sector is considered to offer significant potential, with foreign investors attempting to build a profile in the market.

A sense of optimism is prevailing as the prospect of a new political era is instilling a greater degree of confidence in Nigeria’s future. Nigeria now boasts the largest economy in Africa, with an estimated gross domestic product (GDP) of N90trn.

The prospect of a new political era is instilling a greater degree of confidence in Nigeria’s future. This has created uncertainty regarding the strength of the economy, which came to a standstill at the end of 2014 due to the decline in the Naira against the U.S. dollar.

Enhanced by the uncertainty surrounding the presidential elections in April, 2015, the country experienced capital flight as foreign investors were unclear regarding the stability of the operating environment, owing to the fluctuating economic conditions.