Premiums in the Insurance Sector increased to over N300 billion in 2015 from a paltry N75 billion in 2005, the Director General of the Bureau of Public Enterprises (BPE), Mr Alex A. Okoh disclosed.
This amounted to a growth of N225 billion in premiums in 10 years.
Speaking at the investiture ceremony of the 23rd Chairman of the Nigerian Insurers Association (NIA), Mr Tope Smart, in Lagos, the BPE boss said spurred by the potential growth in the sector, foreign investors have acquired substantial equity in local insurance companies.
The Bureau’s Head, Public Communications, Amina Tukur Othman, in a statement, quoted the the DG as listing the foreign investors to include Old Mutual of South Africa which has substantial investments in Oceanic Insurance, Sanlam Insurance in FBN Life Assurance, Greenoaks Global Holdings of the United Kingdom in Ensure Insurance Plc(former Union Assurance),NSIA Participation of South Africa in ADIC Insurance and AXA of France with substantial investments in Mansard Insurance.
Okoh maintained that despite this, there was still much room for improvement in growth in the sector as the country by the 2016 statistics, is 10th in Africa with 0.27 percent insurance penetration premiums as a percentage of Gross Domestic Product (GDP) compared to South Africa, Namibia and Mauritius with 14.27 percent,6.87 percent and 6.4 percent respectively.
According to the DG, lack of consumer trust, low implementation of compulsory insurance and lack of adequately skilled professionals continue to inhibit the growth of the sector.
“Whilst the foregoing may make for bleak reading, a number of factors, including: The emergence of a middle class with increased spending power, a large youth population who are technology savvy, and increasing female empowerment thus enabling women to make spending decisions, all make the sector ripe for growth.
“And the possibility of achieving this growth can become a reality with the right policy formulation, a sustained sensitisation program to educate the population on the benefits of insurance, engaging the support of other sectors including the telecoms sector to increase market penetration for insurance”, he said.
He announced that the Federal Government’s privatisation program in the insurance sector is set to continue with the Public Offer of Nigeria Reinsurance Corporation which would open soon and solicited the support of the Association to make the offer a success.
Okoh told participants at the forum that the Bureau had privatised some insurance enterprises which include Niger Insurance Corporation, through Initial Public Offer (IPO); Nigeria Reinsurance Corporation, through core investor sale; and National Insurance Corporation of Nigeria also through core investor sale.
The Director-General while commending the Chairman on his election as the 23rd Chairman of the Association, described him as a man who throughout his career has demonstrated a high degree of integrity, professionalism, capability and deep commitment to the insurance industry.
He expressed the hope that the new chairman would bring the same level of commitment and diligence to his new position and “will achieve even greater success”.