Strategic investors optimistic on potential of country’s insurance market

Strategic investors with the vision to play dominant role in the nation’s insurance industry are optimistic about the potential for growth despite harsh economy. They believe that the potential is huge and require astute business men with global reach and perspective.

While they believe that the low penetration of the Nigerian insurance market was not as result of low purchasing power of the masses, but lack of drive by existing players on right products and channels.

Some of the investors who are currently waiting licensing of the industry regulator to enable them play in the market say a lot can be done in the local market to position the industry for growth.

“We see an opportunity that needs to be tapped. What it requires are players with the capacity, spread and I can assure you that industry will make the right impact, the investor said.

Fola Daniel, former commissioner for Insurance had said as helms man of the regulatory authority a year ago that NAICOM stopped issuance of fresh license for a long time; the reason according to him was that it needed some level of consolidation in the industry.

“There was no law that says we cannot issue fresh license, but we felt we should hold on for a while to enable some consolidation including mergers, injection of fresh funds and investment from within and outside Nigeria into existing companies”

He said: “In democracy, no government official or commissioner can say there would not be issuance of license, you cannot do that. If a company meets all the requirements, we cannot but issue license, we also look at the moral factor such as, would the company create additional value and improve the industry?

“We also have the responsibility to help the government in job creation and reduce unemployment. So, if a new company is coming on board and it would generate employment for Nigerians, add value to insurance, why would we not give it a licence.”

Tope Smart, group managing director, NEM Insurance plc had also said growing interest in the Nigerian insurance industry is a welcome development, and signifies two things. One, that the National Insurance Commission can still issue fresh license if need be and secondly that people both within and outside Nigeria are showing interest in the country’s insurance industry

Smart said their coming is an additional capacity for the industry and set’s room for increased competition.

According to the African Insurance barometer, given the abundance of excess capacity in global insurance markets and the growth potential of the African insurance markets, global insurers are expected to maintain, if not increase, their market share in the continent’s insurance business.

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