Since the revolutionary changes in the Nigerian Insurance Law in 2003, it has become a legal requirement for certain types of insurance, including Motor Insurance. Due to the fact that insurance is now a must rather than an option, the Nigerian Insurance sector has been going from strength to strength.
With a thriving and profitable business like insurance, it was not long till big international companies entered the market. In 2014 alone we saw NSIA, Old Mutual and quite recently, AXA enter the Nigeria Insurance market. Late last year AXA took a share in Mansard Insurance plc.
It is expected that more major international players will enter the insurance sector in Nigeria, and why not? The Nigerian insurance sector is predicted to further grow, provide value for money and be profitable. With these growth traits, the sector is expected to become even more competitive.
The retail arm of the Nigerian insurance sector is where there are currently gaps, and it is expected that foreign companies are willing to fill these gaps. They have the experience and know how on how to package up and sell retail insurance solutions. No doubt, Nigerian Insurance companies will also learn and adapt to better service the retail insurance buyer.
What is drawing foreign investment into Nigeria’s insurance sector? A thriving middle class and a population of over 168 million, growing at 2.5 per cent per annum – that is pretty hard to resist and difficult to ignore!
Nigeria has a large population; therefore insurance companies have a good opportunity to sell different types of insurance products to a large audience. Foreign companies have seen the opportunity for better penetration in Nigeria’s thriving insurance industry.