National Insurance Commission (NAICOM) headquarters
Obinna Chima
The Nigerian insurance industry presents growth opportunities owing to low penetration level of the sector.
In recent times, a number of global insurers have entered into the country to tap into these growth prospects.
Allianz, a German-based insurance
company, was the latest foreign entrant into the Nigerian insurance
industry. Some of international firms that had entered into the market
through acquisition of local insurance companies were Prudential, Old
mutual and Sanlam.
This, according to analysts at
Lagos-based CSL Stockbrokers Limited, implies that investors are
optimistic on the strong growth potential and improving fundamentals of
the insurance sector.
“The Nigerian insurance market’s key
strength relates to the country’s demographic profile in that the market
has an emerging middle class and a young and growing population. The
primary developments seen in the industry are on the back of regulatory
changes.
“There have been increases in capital
requirements aimed at driving industry consolidation through the
creation of a smaller number of larger and well capitalised insurers.
“In addition, a “no premium, no cover”
rule which ensures that no insurer will grant cover without fully
receiving the premium or a premium receipt from the relevant broker was
introduced, which has led to improvements in the payment of premiums to
insurers, improving their cash flows and liquidity,” CSL Stockbrokers
Limited added.
Germany’s Allianz revealed last week
that it plans to pay $35 million for 98 per cent stake in Nigerian
insurer, Ensure Insurance, in a push for growth in Africa, where many
people are uninsured. Foreign insurers are banking on growing premium as
the continent develops its infrastructure and a consumer class demands
protection from risk.
A Reuters report had disclosed that
Allianz said that it would acquire the stake from UK-based holding
company Greenoaks Global Holdings.
Ensure Insurance offers life and
non-life cover to businesses and retail clients and generated 11 million
euros ($13 million) in gross premiums last year.
The Allianz group has operations in 16
African countries and views the Ensure acquisition as an opportunity to
tap into Nigeria’s strong demographics and economy.
“The transaction gives Allianz access to
the fifth-largest insurance market in Africa and is in line with our
strategy to capture long-term growth opportunities on the continent,”
said Allianz Africa spokeswoman Bettina Sattler.
“It is also a market with significant
entry barriers, which is another reason why this acquisition is a great
opportunity for us. Entering Nigeria with a team that knows the market
was essential for us.”
Allianz expects the acquisition to close this year and said it intends to retain Ensure’s management team.
The German insurer plans to focus on property and casualty insurance, particularly underwriting industrial and speciality risk in the energy sector as well a large complex risks such as infrastructure.
The German insurer plans to focus on property and casualty insurance, particularly underwriting industrial and speciality risk in the energy sector as well a large complex risks such as infrastructure.
“In the past two years, we have been
quite visible in Nigeria, sharing our risk-management expertise in
power, oil and gas, as well as cyber insurance,” Sattler had said.
“Now that we have a company locally … the retail sector is another growth sector for us.”
Allianz followed British insurer Prudential which last month bought a majority stake in Nigeria’s Zenith Life to gain access to the African country’s fast-growing insurance market.
Allianz followed British insurer Prudential which last month bought a majority stake in Nigeria’s Zenith Life to gain access to the African country’s fast-growing insurance market.
The Allianz Group has more than 86 million retail and corporate customers.
No comments :
Post a Comment