Insurance
From The Report: Nigeria 2013
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With a total premium value of $1.6bn in 2011, Nigeria’s insurance market is the biggest in West Africa, but in a wider context the market remains relatively undeveloped and coverage in the retail market is mostly limited to motor insurance. Issues including prohibitive costs, inconsistent enforcement of mandatory coverage, fake insurers and policies damaging the sector’s reputation, and a fragmented market of small and undercapitalised providers have presented impediments to the sector’s growth. Although top-line expansion has not fulfilled expectations for the overall value of the market, insurers and the regulator are continuing to explore avenues for growth while removing obstacles. A leap in market size is expected in the current decade thanks to continued policy efforts and steady growth in disposable incomes for middle-class Nigerians.

This chapter contains an interview with Fola Daniel, Commissioner for Insurance, National Insurance Commission.

Articles from this Chapter

Overview

Exploring options for growth: Plans for more stringent regulation are expected to improve sector penetration
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With a total premium value of $1.6bn in 2011, Nigeria’s insurance market is the biggest in West Africa, but in a wider context the market remains relatively undeveloped and coverage in the retail market is mostly limited to motor insurance. Reforms are ongoing at the federal level, with both successes and failures seen in recent years. A giant leap in market size is expected in the current decade thanks to continued policy efforts and steady growth in disposable incomes for middle-class Nigerians.…

Interview

OBG talks to Fola Daniel, Commissioner for Insurance, National Insurance Commission (NAICOM)
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Interview:Fola Daniel To what extent is there room for consolidation in the global insurance market? FOLA DANIEL: Companies will have to merge if they want to become larger and serve customers better. With a population of 1.3bn, China has 52 insurance companies, while India, with a population of 1.1bn, has 32 insurance firms. Meanwhile, South Africa has a total of 15. At present, Nigeria has 59 insurance groups, but NAICOM is developing the industry to have fewer, but stronger and more viable…

Analysis

Domestic focus: New legislation and emphasis on energy-related risk are set to drive development of local content
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A 2010 law mandating local content for insuring risks in the energy sector domestically aims to create growth from the current small base in the insurance sector. Enforcement is a potential challenge, if recent history and the current legal environment are any indication. Further, market studies indicate that profiting from providing coverage to this complex and capital-intensive activity requires careful risk management and a commitment to sufficient capital reserves and the incremental building…

Analysis

Reforms ahead: Near-term changes to the pension system are under discussion
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Officials have been at work reforming Nigeria’s pension system for almost a decade, and are showing no signs of losing steam. While early attempts have failed to fix problems entrenched in the system, the government seems determined to tweak its features for as long as necessary to find the right mix and eliminate fraud from the system. An overhaul of the landmark pension reform of 2004 may emerge in 2014 as the primary change. In the meantime, private sector service providers continue to refine…