NAICOM’s Head of Strategy, Babajide Oniwinde believes that paid insurance premiums will grow to over N1 trillion ($6.3bn) over the next 5 years. In 2012, premiums rose to N260 billion ($1.6bn), a 12% increase from 2011’s N233 billion ($1.47bn).
With the recent directive by the FG that all organizations must provide compulsory insurance coverage for employees, a growing middle class and an increasing number of high net-worth individuals, the sector is expected to gather more impetus.
Already, these favourable conditions have attracted investment companies like London-based Old Mutual and Sanlam of South Africa.
Old Mutual’s acquisition of a majority stake in Oceanic Life, a unit of Ecobank Transnational Inc. (ETI), was approved in March, while Sanlam bought a minority of FBN Holdings plc life business in 2010.
Also, NSIA Participations SA Holdings, based in Ivory Coast, acquired a majority of ADIC Insurance Ltd., a unit of Diamond Bank plc, and Assur Africa Holding, a group of European development finance institutions, purchased GTAssurance plc, before changing its name to Mansard Insurance plc.
With over 160 million people, the insurance sector in Africa’s second-largest economy still falls short compared to developed countries.
For instance, Switzerland – a country of about 8 million people – had insurance premiums 38 times higher than Nigeria last year.
In August, a report by Nigerian opinion polling and research organization, NOI Polls Limited revealed that 9 in 10 Nigerians (representing about 86%) are uninsured while vehicle/car insurance (63%) is the most commonly purchased insurance cover compared to a much smaller 20% of the population that had life assurance.