Nigeria has been described as Africa’s faster growing insurance market with 18.0 percent growth rate, while Angola is leading with 35.0 percent nominal growth rate. This statistics was disclosed today in a presentation prepared by Afrinvest West Africa titled “Nigerian Insurance Market- Capital Market Perspective” at the ongoing Insurance Future Summit in Abuja Nigeria.
Others are Kenya recording 23.0 percent growth rate, South Africa with 17.0 percent growth trailing behind Nigeria. While Egypt, Algeria and Namibia recorded 13.0 percent, 12.0 percent and 4.0 percent respectively. The average is said to be 14.8.
Meanwhile the paper observed that in Nigeria, the Insurance Sector is still the slowest financial services sector. The Stock market turnover of the banking sector assets is estimated to be 103.7 percent, while that of the Insurance sector is 36.2 percent indicating a difference in growth rate of 186.46 percent. While Gross Insurance Premium, according to the presentation is 15.3 percent.
The presentation disclosed that the average insurance underwriter reported only N1.5bn of Gross Premium Income (GPI) in 2006. It says most premiums were sourced from covering risks in same insurance class (life, motor, fire, marine, aviation, general accident and workmen’s compensation)
Again, at the Insurance Future Summit, it was confirmed that a large number of insurance brokers (510 in 2006) acted as major intermediaries between corporate customers and underwriters in the period under review.
The sector also recorded a 53 percent Broker dominance ensures corporate premium payments receivables ratio in 2006, with payments hardly ever received on time.
Again, the industry is hence highly competitive especially on pricing considering slow growth of overall market size
Apart from these, the industry is easy to enter for new players as evidenced by influx of commercial bank subsidiaries eager to take advantage of captive parent insurance business.
However, it was confirmed; by industry analyst and players that the insurance sector has of recent dominated the Nigerian Capital Market; with the volumes of shares and trading prices, a development which is unprecedented.
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