Insurance industry to see more consolidation in 5yrs – Oshin

With ongoing reforms in the insurance industry, coupled with growing competition following fresh local and foreign investments impacting on business operation, the insurance sector is expected to become stronger with more consolidation.

This, however, will require that local operators deploy strategies to build capacity and create growth inwards in order to become relevant and build the needed muscle to withstand possible market shocks.

Wole Oshin, director, Custodian and Allied plc, a major investor in the Nigerian insurance market, sees the industry coming out stronger in the next five years and becoming a force to reckon with in the national economy.

“I’m very optimistic that the market will get stronger. In the next five years, I see a stronger market; I see a market further consolidating and I see a market that will have a voice in Nigeria and be in its right place in the economy,” he said, adding that a lot of these things would be happening rapidly.

Oshin, who sees the coming of foreign insurance changing the face of the industry, said there was need to be more strategic because there were foreign players coming in.

“If you sit on the strategy table and ask yourself very fundamental questions, you will agree that we can’t ignore the foreign players, which requires that local players go back to the drawing board and re-strategise,” he said.

“My prayer is that we should have sufficient local champions. The banking industry foresaw it coming and they positioned themselves. Now, no foreign player can buy Zenith Bank, Guarantee Trust Bank, First Bank, etc – they are too big. This is the challenge the insurance industry now faces. It is good that they come, but we must not be swept away, so we need local champions and I’m an advocate of local champions, at least 10 local champions,” he added.

For Custodian and Allied, he noted that its vision had been very clear, adding that the company always wanted to set a standard in the industry.

“We always wanted to grow organically and through mergers and acquisitions. Moving forward, we can’t rule out mergers and acquisitions but we will also be looking at growing from inside outwards,” he said, stating that the company intended to go into micro-insurance, having recognised the challenge with area of the business as well as the opportunities in it.

“Micro-insurance is a platform to give back to society, and having operated as a corporate top-end insurance organisation, micro insurance will enable us have that interaction with the lower end of the market. We don’t expect to make profit from it immediately because we don’t think it’s an immediate profit-making venture, but we are willing to deploy capital so that insurance can penetrate further to the grassroots, so that Nigerians can know the value of insurance in economic stability,” Oshin further said.

On the issue of regulation, he pointed out that it was a worldwide development and a natural course for development. “It’s for all of us in the industry to increase and step up our structure to be able to handle it. Regulation is for good at the end of the day and anything good does not come easy,” he said.

Modestus  Anaesoronye